Interview: Germany's second PV tender round

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pv magazine: The second PV tender round has taken place. The Federal Network Agency awarded 33 bids worth 159.735 MW. This means that the last PV plant that received a subsidy and therefore is decisive for the unit price must at least be 9.74 MW in size. Is that right?

Yes that is right.

What is the expected unit price level?

I believe that it would be around €0.085/kWh (US$0.0941/kWh)

Does that not show, with regards to this tender with the unit price model, that there has been some gambling amongst the bidders?

The size of the last subsidized bid is not necessarily an indication of that, rather the level of the unit price. But the uniform pricing model is one that virtually invites gambling, and this also happened in the second tender round. A number of developers definitely put on the table unrealistically low prices in the bidding round. They went in, in the hope that the unit price will be upped by the more expensive, realistic bidders.

Who can afford such gambling?

There are currently project developers who, compelled by necessity, have gotten carried away with low bids. Even big power utilities who can afford low margins have the ability to take part in the price war. Those who remain on track are the sustainable projects that have realistic prices.

Do you expect a succession procedure?

I will not rule out a succession procedure. It is possible that some bidders who have offered extremely low prices will connect their PV systems under the existing EEG conditions. Their deposits will be forfeited. It is hard to say nonetheless whether as a result of this the necessary 30 MW will be reached.

How do you rate the uniform pricing model as a whole?

It all depends on what you want to achieve with it. If the goal is to drive the bidders into a potentially ruinous price war, then it is the right thing. But if you expect PV expansion at a fair price, then I think this method is inappropriate. The aspect of quality falls short, as far as I am concerned, with the uniform pricing model. Pay-as-bid is a better method as everyone assumes the responsibility for the price offered and speculations are limited.

Translated and edited by Shamsiah Ali-Oettinger