Iberdrola Exercises Step-In Right Offshore Germany

Contracts & Tenders

Spanish energy company Iberdrola has exercised its step-in right to the pre-developed site O-1.3 in the German Baltic Sea where it will develop the 300 Windanker offshore wind farm.

Iberdrola/Illustration

Iberdrola secured the step-in right for the EUR 800 million Windanker in the 2018 auction when the project did not make it through the second transitional tender, organised before the country switched to the new tendering model.

This right of entry gave Iberdrola the option to step-in based on the lowest bid of any other bidder in the public auction for this area and acquire the right to construct and operate a project.

Windanker GmbH, a subsidiary of Iberdrola, did submit a bid in the recent auction where the Federal Network Agency (Bundesnetzagentur) selected RWE Renewables to develop a 300 MW offshore wind farm at the O-1.3 site with zero subsidies.

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EDF Renewables also placed a zero-subsidy bid to develop a project with a capacity of up to 433 MW at the N-3.8 zone in the North Sea. Canada’s Northland Power holds a step-in right for the N-3.8 area in the North Sea.

According to Iberdrola, the Windanker project will reinforce the company’s Baltic Hub in Germany which also includes the operational 350 MW Wikinger offshore wind farm, and the 476 MW Baltic Eagle, under construction. Following a total investment of some EUR 3.5 billion, the Hub will have an installed capacity of over 1.1 GW by 2026.

Iris Stempfle, Managing Director of Iberdrola Renovables Germany, said: ”With this third offshore wind farm project in Germany, Iberdrola is underlining its commitment to Germany as one of the strategically important markets. The realisation of Windanker on a zero-bid basis confronts us with challenges due to the special conditions in the Baltic Sea. We are able to master these challenges through synergies with our Baltic Hub. But until offshore wind energy is fully integrated into the market, we consider an intelligent transitional market design to be necessary.”

First Zero-Subsidy Wind Farm in German Baltic Sea

Thanks to the experience already gained in the Baltic Sea and by using the latest wind technology, such as 15 MW-class turbines, Iberdrola expects to operate the Windanker wind farm highly efficiently. Further advantages could result from the almost simultaneous construction with the East Anglia Hub in the UK and from further planned projects in the European Baltic Sea, the company said.

Windanker will come on stream in 2026 and will be the first offshore project in the German Baltic Sea at market conditions, Iberdrola said. Most of its electricity output is expected to be allocated to long-term power purchase contracts in the German market.

Prime Minister of Mecklenburg-Vorpommern, Manuela Schwesig, said: ”We need more offshore wind farms for the energy transition to succeed. This is an economic opportunity for Mecklenburg-Vorpommern. The construction and operation of the wind farm will create additional jobs. Additionally, we have the opportunity to locate climate-friendly industries in Mecklenburg-Vorpommern in the upcoming years that produce on the basis of wind power.”