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GWEC: Covid-19 impacts wind auctions

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Global Wind Energy Council (GWEC) has, through its Market Intelligence’s services, shown the impact of the COVID-19 to wind auctions which have been delayed or postponed in a few countries, while other countries have found solutions to continue their scheduled auctions and continue driving forward wind power growth.

From January to April 2020, a total of 3.35 GW of wind power capacity was auctioned, with 2.1 GW in Europe and the remaining 1.2 GW in Asia. During the same period in 2019, nearly 5 GW of capacity was auctioned. This significant difference can predominantly be attributed to the COVID-19 crisis, with delayed and postponed auctions in key markets such as Brazil, China, and the US for offshore wind.

However, many key markets for wind energy have continued their auctions as planned despite the crisis, which will be important in securing growth of the industry. In India, the world’s fourth-largest onshore wind market, 1.2 GW of renewable hybrid capacity was auctioned for projects that include both an energy storage system and renewable energy capacity. A tender for another 2 GW of wind energy capacity was announced in early March 2020, with tariff caps removed from the auction to boost investment.

In Europe, France held their fifth auction round for 1.7 GW of renewable energy projects, awarding 750 MW of this capacity to onshore wind projects. While this wind tender was oversubscribed, the next round which was originally scheduled in July will be shifted to November due to the COVID-19 crisis.

In Italy, the first tender was held under the country’s new renewable auction scheme in February, resulting in 495 MW of wind capacity. Germany also executed two of its renewable energy auctions out of the seven planned for 2020, however, both onshore wind tenders went undersubscribed, drawing just 674 MW of capacity out of the 1,200 MW available.

Emerging wind markets in Lithuania and Greece also held auctions in Q1 2020. In Lithuania, the first technology neutral renewable energy auction was held, resulting in 75 MW of wind capacity. In Greece, their second join wind and solar auction in April 2020 resulted in 153 MW of wind power capacity and a record breaking tariff of €0.04911/kWh for a 200 MW solar project.

Looking ahead, the COVID-19 crisis is expected to delay further auctions this year. Brazil has postponed all tenders in 2020 and Colombia is unlikely to issue any new tenders this year due to a drop in energy demand from the crisis. New York has also decided to hold off on plans to solicit a second round of offshore wind bids this year.

Other countries such as Germany and Greece plan to go ahead as planned with their scheduled auctions, but with stipulations such as extending deadlines for licensing and construction and not announcing the results immediately so that project deadlines do not come into force.

Auctions and tenders have become essential to driving wind power growth across the world, accounting for 80 per cent of all new installations in 2019, excluding China and the US where Feed-in Tariff and PTC were key drivers respectively.

Anela Dokso

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