Offshore Wind: Industry Associations Warn of Missing Expansion Targets

Just yesterday, Chancellor Friedrich Merz rejoiced that the expansion of offshore wind energy had been concretely advanced. At the North Sea Summit in Hamburg, heads of government from several neighboring countries agreed to make the North Sea region the largest hub for clean energy. However, a press release from various industry associations of the German offshore wind industry fuels doubts about this. The declaration published by the Offshore Wind Foundation even predicts that Germany will not be able to meet its expansion target of 30 gigawatts by 2030 and will only achieve 20 GW. The target, they say, will be achievable at the earliest from 2032 onwards.

At first glance, it appears that the expansion progressed well in 2025: 41 new offshore wind turbines with 518 MW were connected to the grid. In total, the number of installed turbines in the German North Sea reached 1680 units with 9740 MW. Another 19 turbines with a total of 278 MW have already been erected but are not yet feeding into the grid. Furthermore, 65 foundations were installed, according to the industry associations' balance.

Failed Tender as a Warning Shot

The industry attributes the current stagnation to two factors: Firstly, delays in grid connection are hindering rapid progress. Secondly, the industry sees a failed tender in August 2025, which received no bids, as a warning shot. Without reform, there may be few or no interested parties in the future. Certainty on this matter could come as early as June, when another tender concludes.

Among other things, the associations advocate for not awarding wind farm areas to the highest bidder in the future. Projects become unprofitable due to so-called negative bidding. Many companies then do not build at all. Economists and parts of the political sphere, on the other hand, assume that a fair market price for the use of public land is appropriate. This would mean billions in revenue for the state would be forgone. The payments would help to skim off excessive profits from companies and reduce the costs of the energy transition for the public, for example, by lowering grid fees with the revenue.

Demand for a Safety Net

Another demand from the offshore industry is the introduction of bilateral Contracts for Difference (CfD), as is customary in Great Britain. Behind this technical term lie predictable revenues through fixed electricity prices. If the market price is lower, the state pays the difference to keep the wind farms profitable. If the market price is higher, the state receives the excess profits back. However, this "safety net" is not undisputed even among actors in the renewable energy sector: The German Renewable Energy Federation warns in an analysis that this would remove the incentive to produce electricity when it is most needed. Wind farm operators could also displace private supply contracts in favor of state subsidies.

The offshore industry is also advocating for better security for long-term supply contracts with large industrial customers (Power Purchase Agreements) and for adjusting penalties. According to industry representatives, the current penalties for interested parties who win the bid for a wind farm area are set in such a way that companies prefer to "gamble" rather than actually build. More federal funding for port infrastructure, a stronger focus on the safety of the facilities, and protection against market distortion by state-subsidized actors are also on the industry's wish list.

(mki)