For the first time, PV installations in Denmark can participate in a German auction alongside solar installations from Germany.
With this first cross-border auction in Europe, we are sending an important signal and underline that Germany is ready to work closely together with its European neighbors on promoting renewable energy, said Rainer Baake, state secretary in the Federal Ministry for Economic Affairs and Energy. We want to fully evaluate the experience gained in this process with Denmark, and to draw on it in future plans for cooperation with other European partner countries.
Federal Network Agency Vice President Peter Franke added, "Since the national auctions have already proved a success, I am confident that the cross-border auctions will prove to be the same."
Germany and Denmark signed a cooperation agreement signed in July on mutual auctions for ground-mounted PV installations as well as the Cross-border Renewable Energy Ordinance.
Denmark is planning a 50 MW auction for ground-mounted solar this year in which bids from sites in Germany can also participate. Bids for PV installations located in Denmark or Germany can be submitted in the auction. The winning bids will be determined by the level of the bid, irrespective of the location of the installation.
The payments to the installations in both Denmark and Germany will be based on the German Renewable Energy Sources Act, the Cross-border Renewable Energy Ordinance and the provisions of the cooperation agreement.
The Federal Network Agency said the cooperation strengthened the regional cooperation on energy between Denmark and Germany and fulfilled a requirement imposed by the European Commission. The key point is that the cooperation must be mutually beneficial and have a genuine impact on the energy transition in both countries. For this reason, the agreement is based on the principle of reciprocity and requires that the electricity be physically imported into the other country.
Investors have until Nov. 23 to submit bids for the auction to the Federal Network Agency. The maximum installation size for this auction round is 10 MW, the maximum bid will be 11.09 euro cents ($0.12) per kilowatt-hour.
The Danish-German auction is being organized in addition to Germanys next scheduled national auction round, for which bids of PV installations in Germany can be submitted up to Dec. 1. Bidders can submit bids for both auctions. If they win funding in the Nov. 23 round, they will still have time to withdraw bids already submitted for the December auction, or they can wait for the results of the cross-border auction before bidding for the later round.
National auctions currently use the "pay-as-bid" procedure to establish the price levels, which means that every successful bid is awarded a contract based on the price specified in that bid. However, the cross-border auction adopts the "uniform pricing procedure," which means the last successful bid to be accepted sets the price for all successful bids. The price mechanism was tested last year in the Germanys national auctions.