Offshore wind energy: 2023 site development plan published and first auctions kicked off

On 20 January 2023, Germany’s Federal Maritime and Hydrographic Agency (Bundesamt für Seeschifffahrt und Hydrographie, “BSH”) published its 2023 site development plan (Flächenentwicklungsplan). This plan puts the country’s statutory goals for expansion of offshore wind energy on a sound footing. These goals were recently expanded when the Offshore Wind Energy Act (Gesetz zur Entwicklung und Förderung der Windenergie auf See, “WindSeeG”) was amended with effect as of 1 January 2023, stipulating that installed capacity be increased to 30 gigawatts by 2030. To reach these goals, the 2023 WindSeeG provides for a number of measures to accelerate planning and approval processes, a significantly larger area across which capacity will be auctioned, and new auction procedures. The recently published 2023 site development plan forms a basis for realising offshore wind energy expansion. The first auctions have already started for offshore wind energy installations located on sites which have not been subject to a preliminary investigation conducted centrally.

What the 2023 site development plan covers

The site development plan is prepared, amended and updated by the BSH in accordance with the WindSeeG. It forms the foundation of sectoral planning in offshore wind energy, setting binding stipulations for specific areas and sites for wind energy generation in the North Sea and Baltic as well as the auction volume and how it is distributed. In addition, the plan governs grid connection and commissioning of offshore wind energy installations, offering a basis for a European offshore electricity grid connecting individual wind farms. The plan also defines a test area to support research and development in Germany’s territorial waters.

Realising the goal of expanding installed offshore wind energy capacity to 30 gigawatts by 2030 will mean more than quadrupling current capacity, which stands at 8 gigawatts. The 2023 site development plan therefore identifies potential sites, consolidates capacity on existing sites, and defines which auction procedure the specific sites are auctioned in. The next step is for the BSH to carry out a preliminary investigation, where this is stipulated by the 2023 plan; other sites will be put up for auction without such investigation.

As a rule, it is the Federal Network Agency (Bundesnetzagentur, “BNetzA”) that puts the stipulated areas and sites up for auction. “Other energy generation areas” (sonstige Energiegewinnungsbereiche) constitute an exception and are dealt with below. If a preliminary investigation of the sites has been carried out, the results of the investigation are made available to the bidders. Once the approval procedure has been completed, successful bidders construct wind energy installations on the respective site. Such bidders are entitled to the market premium (where their bid exceeded zero) and to use grid connection capacity.

The site development plan schedules the years in which auctions are held as well as the commissioning of wind energy installations together with their grid connections. 2021 and 2022 saw the first auctions of offshore installations located on North Sea and Baltic sites which had been subject to a preliminary investigation conducted centrally; further auctions are planned for 2023 to 2027. The next auction for such sites will be for the N-3.5, N-3.6, N-6.6 and N-6.7 sites in the North Sea. This auction is scheduled for 2023 and will be announced on the website of the BNetzA’s Ruling Chamber 6.

Start of offshore auctions for sites which have not been subject to a preliminary investigation conducted centrally

The first auctions for offshore wind energy installations were announced on the BNetzA’s website on 31 January 2023. The auctions are for the N-11.1, N-12.1, N-12.2 sites in the North Sea and the O-2.2 site in the Baltic Sea. These sites were not subject to a preliminary investigation conducted centrally. The total auction volume is 7 gigawatts, and all bids must be submitted by 1 June 2023. According to the auction information, the maximum value for electricity from the offshore wind energy installations at these sites is 6.2 ct/KWh. Commissioning of the wind energy installations and associated grid connections for these sites is planned for Q3 2030 and, in the case of the N-11.2 site, for Q4 2030. The remaining sites designated in the 2023 site development plan that have not been subject to a preliminary investigation conducted centrally, namely N-11.2 and N-12.3, are scheduled to be auctioned in 2024 and commissioned in 2031.

More detailed information on the requirements for bids and further guidance can be found on the website of the BNetzA’s Ruling Chamber 6.

New auction procedure for projects in “other energy generation areas”

In addition to areas and sites for wind energy generation, “other energy generation areas” can be designated in the site development plan. Offshore wind energy installations and other energy generation installations which, in both cases, are not to be connected to the grid can be constructed in other energy generation areas to test new innovative concepts. Other energy generation installations means installations that generate electricity or other energy carriers from renewable energies other than wind. The WindSeeG explicitly mentions the use of hydropower, for example. In other energy generation areas – which by definition are not connected to the grid – the main potential uses are those that do not require a grid connection, e.g. because the electricity generated there is consumed directly at sea. This could be the case for an electrolysis plant for hydrogen production.

Following the cancellation of SEO-1 (designated in the 2020 site development plan), SEN-1 is now the only “other energy generation area” designated in the 2023 site development plan. The SEN-1 site covers approximately 101.61 km² and is located in the Exclusive Economic Zone (“EEZ”) of the North Sea. If hydrogen were to be produced at SEN-1 by means of electrolysis using electricity from offshore wind farms, the area could be connected with a hydrogen pipeline.

The Ordinance on the Allocation of Other Energy Generation Areas in the EEZ (Verordnung zur Vergabe von sonstigen Energiegewinnungsbereichen in der AWZ, “SoEnergieV”) has introduced a new auction procedure specifically for other energy generation areas. Application authorisations for zoning procedures for the construction and operation of energy generation installations are awarded as part of this auction procedure, which – in contrast to other auctions – is not carried out by the BNetzA but by the BSH. Such an auction procedure will be announced on the BSH’s website within six months of the announcement of the 2023 site development plan and will be carried out at the earliest six months after this announcement, i.e. for SEN-1 probably between August 2023 and January 2024. When submitting the respective bids, specific information must be provided on the project to be realised in the (sub-)areas of the SEN-1 site, including information on the envisaged energy conversion chain and the final energy carrier, the anticipated quantity of energy to be generated, the innovative aspects of the project and the concept for transporting the final energy carrier, insofar as the energy generated is not consumed at sea. Overall, it must be clear from the project description that the project in question can be implemented in other energy generation areas, as would be the case for a hydrogen project, for example.

Summary and outlook

The expansion of offshore wind energy is picking up speed. The 2023 site development plan creates the framework conditions for rapid expansion so that the relevant goals can be achieved. The next procedure for updating the site development plan in order to lay down the expansion plans beyond 2030 is likely to begin as early as this spring.

The first auctions for offshore wind energy installation in the North Sea and Baltic have already started, and several more are planned for this year.