Wind giants in Germany are not so keen on market rates

Bloomberg

The first time Germany auctioned offshore wind projects, developers were happy to forgo any subsidies, confident the technology was robust enough to turn a profit unaided. Now, they’re not nearly so sure.
Germany’s offshore wind giants now are looking at a UK programme that would ensure they get paid enough for their power, no matter what wholesale prices are doing.
Potential bidders in Germany’s next round of offshore auctions in 2022 including Orsted A/S and Vattenfall AB are attempting to convince Chancellor Angela Merkel to draft new auction rules to secure income from the giant machines at sea.
They are concerned the government’s muddled climate policy will make investments in the technology riskier and feel they need guarantees to invest billions of euros.
It’s a stark change from the last round of auctions in 2017 when Orsted and EnBW AG won most of Germany’s maiden offshore wind auction by forgoing the crutch of subsidies. At the time, Merkel hailed the result as a breakthrough in clean power’s competitiveness that might set a precedent.
The government may need to offer the kinds of contracts-for-difference (CfDs) that UK have used to promote the technology.
Those agreements, will lock in the price of power generated by new projects. Winners last year included SSE Plc, Equinor ASA and Innogy SE. Investors seek an offshore payment regime “that makes economic sense — and that’s clearly the CfD system,” Volker Malmen, Orsted’s German managing director, said.
The government is currently evaluating its auction system for offshore wind and has taken note of industry pressure to adopt CfDs, the Economy and Energy Ministry said.