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

Oil major TotalEnergies (TTEF.PA), opens new tab and utility EnBW (EBKG.DE), opens new tab 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 (BP.L), opens new tab 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 euros per megawatt (MW) while EnBW was successful bidding for the 1.0 GW site at 1.065 million euros per MW, the regulator said.

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

RWE (RWEG.DE), opens new tab, 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.