IN Brief:
- BWO has submitted its WindSeeG consultation response calling for a CfD-only offshore wind auction model.
- The association also wants effective indexation and a one-off return route for vulnerable 2023–2025 awards.
- Germany's draft retains a 70GW 2045 target, longer operating terms, and annual tenders of up to 4.8GW.
The German Offshore Wind Energy Association (BWO) has submitted its response to Germany’s proposed 2026 Wind Energy at Sea Act amendment, calling for two-sided Contracts for Difference to become the standard offshore wind auction mechanism rather than a fallback used only when developers reject full merchant-price exposure.
The submission also calls for effective indexation of the CfD, a one-off return mechanism for vulnerable offshore awards from 2023 to 2025, and a proportionate system of securities and penalties. The consultation closed at 10:00 on 17 August after the Federal Ministry for Economic Affairs and Energy opened the formal association hearing a week earlier.
Germany’s draft legislation retains an offshore wind target of at least 70GW by 2045 and envisages annual tenders of between 2GW and 4.8GW. It would introduce bilateral CfDs into the auction framework, extend the standard operating period of new offshore wind farms from 25 to 35 years, and create additional scope for cross-border projects.
BWO supports much of that direction but objects to the proposed sequencing of the revenue-support mechanism. Under the current draft, an auction can initially seek a project willing to proceed without price protection, with a CfD becoming available only if no bidder is prepared to accept the full merchant exposure.
Revenue risk moves to the centre of auction design
The association’s CfD-only proposal would make revenue stabilisation part of the standard tender rather than an instrument triggered by a failed merchant round. That changes the risk allocation at the point developers decide what they can afford to bid for a project expected to require several years of development before construction and operation.
A two-sided CfD typically stabilises revenue around an agreed reference mechanism, with support flowing to the project when market revenues fall below the contractual level and value returning when revenues exceed it. The precise German structure remains subject to legislation and auction design, but the purpose is to reduce wholesale-price exposure sufficiently for lenders and equity investors to assess future cash flows against a more predictable revenue base.
BWO is also seeking indexation. Offshore projects can spend years between auction award, final investment decision, equipment procurement, construction, and commercial operation, while turbine prices, cables, vessels, financing costs, labour, and other supply-chain inputs can move materially during that period.
Leaving those changes entirely with the developer forces bidders either to price substantial uncertainty into an initial auction or accept that later cost inflation may weaken the investment case. Indexation does not remove project risk, but it determines how much of a long development period must be predicted and absorbed in the original bid.
The formal submission develops concerns already visible during the earlier German offshore wind reform process. The June debate established broad political support for changing tender design after deteriorating project economics and weak auction participation; the August consultation is now testing how those principles should be written into the operating rules.
BWO’s second major demand concerns projects awarded between 2023 and 2025 that have yet to reach final investment decision. The association wants a one-off mechanism allowing a developer to hand back an award under controlled conditions, including loss of payments already made, exclusion from rebidding for the same site, and transfer of preliminary investigation results to support a rapid retender.
The proposal is intended to prevent offshore areas and associated grid planning from remaining tied to projects that no longer have a credible route to investment. Auction penalties are necessary to discourage speculative bidding, but a contract that cannot be financed can also leave capacity trapped for years before eventually failing.
BWO has previously estimated that the mechanism could affect projects representing up to 16GW and around €50 billion of investment value. The scale makes the treatment of existing awards more than a contractual dispute between individual developers and government: manufacturers, ports, installation vessels, cable suppliers, and grid planners all base capacity decisions partly on assumptions about which awarded projects will actually enter construction.
The proposed 35-year operating period could improve lifetime economics for new projects, while a tender pathway of up to 4.8GW a year provides a more visible demand signal for the supply chain. Those advantages still depend on developers being able to finance the projects that win the auctions.
Grid timing remains entwined with that calculation. Offshore generation can reach construction only if project development, transmission connections, seabed preparation, procurement, and financing remain sufficiently aligned, while delays in one part of that sequence can change costs across the rest.
The CfD debate is therefore becoming less about whether Germany should offer revenue protection and more about when it should apply, how it should adjust over long development periods, and what happens when earlier awards cease to be financeable. Those details will determine whether the revised WindSeeG produces competitive auction results that survive through to construction.
Germany’s 70GW target remains intact. The more immediate test is whether the legislation beneath it can distinguish aggressive bidding from deliverable economics before another round of offshore capacity becomes stranded between an auction award and an investment decision.