Increased support rates bring Germany’s “first oversubscribed” bioenergy auction

Germany has held its first oversubscribed auction for bioenergy plants, in which bids for a capacity of 532 megawatts (MW) significantly exceeded the auctioned volume of 300 MW, according to the country’s Federal Network Agency (BNetzA).
“Never before have there been more bids in a single auction,” said Klaus Müller, head of BNetzA, adding that most bids were applying for continued support for existing bioenergy installations.
Bioenergy lobbying group HBB Bioenergie said that the oversubscribed tender is a sign of the technology's importance to Germany's energy transition, and that it should motivate lawmakers to ensure improved support conditions in the Renewable Energy Act (EEG).
BNetzA increased the maximum support level by 10%, causing interest in the auction to spike, according to HBB Bioenergie head Sandra Rostek.
Higher investment and operational costs had made an increase in support necessary to allow economically viable operation at a large scale, she argued.
Rostek went on to say that an increase of 20% would be necessary to cover energy production costs for biomass installations, meaning a sustained interest in auctions at current support levels is unlikely.
“For a high participation rate in the medium run, and to reach the government’s expansion targets, another increase of legal maximum support rates is necessary,” she said, adding that auctioned volumes should be increased rather than lowered, as the current EEG regulations stipulate.
While the auction had been oversubscribed for biomass plants that produce electricity locally, no bids were submitted for biomethane plants that can replace natural gas in the grid during peak load times, the BNetzA said.
Only 29 MW of the submitted 532 MW capacity were for new installations, the agency added.
The maximum support had been increased to 19.83 cents per kilowatt hour.
The BNetzA had added a quota of 50% for priority support of installations in southern Germany in order to increase the guaranteed capacity in the region, which has fallen behind the north of the country in renewable power expansion.