Consistent over-subscription in recent German onshore wind auctions has pushed strike prices down sharply, now nearing 2022 levels.
But with many macroeconomic cost drivers still elevated, the question is: are prices declining to levels that threaten project investability?
German onshore wind baseline study
Our latest Insights report explores three baseline onshore wind business cases in Germany and finds:
🔹Location matters.
Projects in the windy north outperform those in the south. However, with the reference yield model and curtailment risks to consider, the most northern locations may not always be best.
🔹 Returns are tightening across the board. Even if projects were to bid and be awarded the auction ceiling price.
🔹 Southern projects in particular struggle with low equity IRRs in our analysis.
With competition expected to remain intense, winning bids will likely need to come in well below the ceiling, which further challenges projects in southern regions with lower wind.
Recent proposals for additional auctions, on top of the already ambitious 11 GW auction pipeline for onshore wind in Germany in 2026, could ease pressure in the near term and allow more projects in the south to compete.
Notably, the German federal state of Bavaria, which has been struggling to get much onshore wind installed to complement its large solar PV capacity, has suggested an additional 5 GW auction to be held in fall 2026. But southern projects may still increasingly need multiple revenue streams to become investable, and further complexity could arise if new curtailment compensation rules are adopted.
Across Europe, investability varies widely — with. e.g. baseline UK projects showing more uniform and higher returns than Germany. Aegir Insights runs baseline business cases across major markets in Aegir Quant™ to provide a global benchmark for renewable economic viability.
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German onshore wind analyses
Aegir Insights' published both an analysis on the falling strike prices in the last five onshore auctions (available to clients on the Aegir Platform) as well as an analysis on the economic feasibility of baseline business cases (accessible for clients here).
Book a meeting with us to discuss access.