TotalEnergies, utility EnBW win in US$3.2-billion offshore wind site auction

Oil major TotalEnergies TTE-N and utility EnBW won a 2.5 gigawatt (GW) German offshore wind site auction that fetched $3.2-billion, the country’s energy regulator said on Friday, marking a plunge in price from last year.

The auction of two plots in the North Sea, located around 120 kilometres (75 miles) northwest of Heligoland, underscores TotalEnergies’ continued interest in big offshore wind projects in Europe’s largest economy.

The French oil major and British peer BP had emerged as winners in a similar auction last year that was seen as evidence that big oil is seeking to diversify away from fossil fuels.

“The results show the attractiveness of investing in offshore wind energy in Germany,” Klaus Mueller, president of Germany’s Federal Network Agency, said. “They are another important step towards achieving offshore expansion targets.”

The auction consisted of two sites worth 1.5 and 1.0 gigawatt (GW) each. The planned offshore wind parks are expected to start operations in 2031, the regulator said.

TotalEnergies won the 1.5 GW site at a strike price of €1.305-million per megawatt (MW) while EnBW was successful bidding for the 1.0 GW site at €1.065-million per MW, the regulator said.

This equates to an average strike price of around €1.2-million per MW, down a third from last year’s average, a reduction not all bidders were prepared to reflect in their calculations.

RWE, Germany’s biggest electricity provider, had initially partnered with TotalEnergies in the auction, but said the French group would implement the project alone and that RWE would exit the consortium.

An RWE spokesperson said that bid levels had been incompatible with its criteria for economic investments and that the company would focus on its 1.6 GW North Sea cluster, for which it has taken a final investment decision.