Several offshore wind tenders in Europe have recently collapsed because no companies wanted to bid. What they had in common was that the governments demanded payment for the right to build the projects. Now Denmark, Germany and the Netherlands have changed course – and Wind Europe hopes that this will mark the end of negative bidding in Europe. The industry association said in a statement.
Denmark's latest tender in 2024 attracted no bids. In response, the government has announced that future tenders will be based on CfDs (Contracts-for-Difference). Germany's latest auction also failed, and the country now plans to abolish unlimited negative bidding and instead introduce CfDs from 2026. The Netherlands has presented a new offshore wind strategy that will phase out negative bidding from 2027. In the meantime, the country has set aside 1 billion euros to support offshore wind development.
However, several countries are still considering negative bidding. This applies to Finland, Sweden, Latvia and Estonia, which have not yet determined their models for future offshore wind tenders. However, Wind Europe hopes that these countries will follow the course of Denmark, Germany and the Netherlands. Wind Europe believes that negative bidding has created uncertainty, higher costs and slowed down investments. The organization therefore sees the governments' change of course as a necessary showdown.
- The 3 governments that have run tenders with negative bidding for offshore wind are now moving towards CfDs. This is wise: negative bidding makes offshore wind more expensive. This means higher start-up and financing costs. And the extra costs end up with consumers and/or the wind turbine industry. Negative bidding may seem like a short-term gain for finance ministries, but it is a long-term cost to society, says Giles Dickson, CEO of WindEurope.
CfDs are already the preferred model in a number of countries, including Belgium, France, Ireland, Italy, Lithuania, Poland, Romania, Spain and the UK.
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