German regulator sets 6.20 cents per kilowatt hour cap for 2020 onshore wind auctions

FRANKFURT (Reuters) - Germany will cap the maximum price for licences to build onshore wind turbines next year at 6.20 euro cents ($0.06) per kilowatt hour (kWh), the federal network regulator said, as it lowers the price to reverse a recent drop in applications.

Germany’s Bundesnetzagentur has to reconcile the need to facilitate new turbine constructions in a green energy drive with that of keeping prices down for consumers, who share the costs of feeding green power into grids.

The agency said that it could not stick to its traditional approach of setting the next year’s prices going by the past few auction results, because of the drop in applications for licences which developers blame on an unreliable political framework.

This approach would have resulted in prices of 6.8-7.8 cents per kWh. By comparison, achieved prices for thermal power delivery next year in the wholesale market are 4.6 cents.TRDEBD1

The agency said that it used its right to intervene to avoid “overly generous support,” while ensuring its move still enabled successful bidders to work economically and profitably.

The planning and permissioning of applications is often lengthened as local citizens agitate to stop the construction of new infrastructure.

These actions, disagreement between states over financial burdens, and inertia by authorities are also slowing related grid expansions.

Germany risks halting its renewable energy course and missing carbon reduction targets if the trend is not reversed.

Stephan Weil, state premier of Lower Saxony, on Friday warned at a press conference that inaction could even lead to a decline in turbines, as old plants went offline and were not being replaced.

The economy ministry last month presented a schedule to reverse the lull in bidding.

Reporting by Vera Eckert and Andreas Rinke; Editing by Elaine Hardcastle