Germany’s Federal Cabinet approved a draft amendment to the Offshore Wind Energy Act (Windenergie-auf-See-Gesetz, WindSeeG) on 2 September 2026, rewriting how the country will auction offshore wind sites starting in 2027. The government has classified the bill as “particularly urgent” (besonders eilbedürftig), and it now moves to the Bundestag and Bundesrat, with parts of the law — including its subsidy mechanism — still requiring European Commission state-aid clearance.
The reform responds to a specific failure: an August 2025 offshore tender drew no bids at all, forcing Germany to cancel its planned 2026 auction round and push it to 2027. That collapse exposed the weakness of Germany’s existing “negative bidding” model, under which developers competed by offering to pay the state for site rights rather than receiving support — a structure that worked when wind and financing costs were falling, but broke down once construction, steel, and capital costs rose sharply after 2022. Germany has not abandoned its underlying targets: the bill keeps the country’s goal of 70 GW of installed offshore capacity by 2045, which the government’s own estimates say requires adding roughly 3,000 MW a year, on average, from now on.
How the new auction works
The core change is a two-stage bidding procedure, used for both centrally pre-investigated sites and non-investigated ones. Stage 1 auctions a site on a purely market basis, with no state subsidy: if more than one bidder applies, the site goes to a dynamic auction where bid prices start at €0/MW and descend from there — in effect, a subsidy-free tender. Only if stage 1 draws no bid at all does the process move to stage 2, a two-sided contract-for-difference (CfD) mechanism modeled on the market-premium and refinancing-contribution structure already used under Germany’s Renewable Energy Act (EEG): the state tops up revenue when wholesale prices fall below an agreed level, and claws back revenue from the developer when prices rise above it. Stage 2 is itself a descending dynamic auction, capped at a maximum strike price (Höchstwert) of 9.487 cents/kWh for non-investigated sites and 9.6715 cents/kWh for centrally pre-investigated sites; Germany’s Federal Network Agency (Bundesnetzagentur) can adjust that cap for an individual site by up to 35%. A successful CfD bidder gets one opportunity, within the first ten years of operation, to opt out of the CfD and switch to a private power purchase agreement instead — but an award itself cannot be handed back unilaterally once made.
The design is explicitly meant to make subsidy-free, market-based development the default, reserving state support for cases where the market mechanism fails to attract a bid at all. It marks a deliberate move away from the negative-bidding dynamic that produced August 2025’s zero-bid outcome.
What changes structurally for future rounds
Beyond the bidding mechanism itself, the amendment changes several parameters that will shape how future auctions are sized and secured. The fixed annual tender volume of 4,000 MW is replaced with a flexible corridor of 2,000–4,800 MW, giving regulators room to adjust the pace of the build-out. Lot sizes are capped, typically at 1,000–1,200 MW per site (500–2,400 MW in exceptional cases). Security deposit requirements rise, to €200/kW for non-investigated sites and €250/kW for centrally pre-investigated sites, reflecting higher project costs, with a new dynamic deposit element added for stage-1 awards. The standard operating lifespan for new awards is extended from 25 to 35 years, with a possible further five-year extension — a change aimed at letting developers spread capital costs over a longer production run.
Two further changes apply specifically to future tenders under the Net-Zero Industry Act (NZIA): cyber- and data-security compliance becomes a mandatory pre-qualification requirement (only EEA-based entities may hold operational control of a wind farm, and project data must be stored within the EEA), and the previous qualitative award criteria for centrally pre-investigated sites — covering decarbonization, labor, and similar factors — are replaced with NZIA-driven resilience criteria. Those can, depending on European Commission findings on market concentration, restrict sourcing turbines or key components from a single non-EU supplier whose market share exceeds certain thresholds; absent such a finding, a statutory backstop caps components sourced from Chinese suppliers at 75%.
Why the 16 GW of stuck awards stay stuck
The extended 35-year operating life and the other economics-improving changes do not apply retroactively to sites awarded in Germany’s 2023–2025 auctions, which remain locked into the old 25-year term. That group of awards — roughly 16 GW of capacity, worth an estimated €50 billion, according to trade group BWO (Bundesverband WindEnergie Offshore) — is precisely the set of projects industry says is stuck without a final investment decision, squeezed by costs that rose well after their winning bids were locked in under the old negative-bidding model. Stiftung OFFSHORE-WINDENERGIE said the new draft “fails to solve the most pressing problem” facing German offshore wind for this reason, and, along with BWO, has called for a time-limited mechanism letting developers hand back awarded sites (with financial consequences) so they can be re-tendered under the new, more workable rules. The German government has so far resisted informal versions of this: in June 2026 it refused a request from TotalEnergies to relinquish its 1.5 GW NordseeEnergies 2 concession (awarded in 2024), with the economy ministry stating that “a concession award constitutes a binding commitment.” TotalEnergies has separately offered around 7.5 GW of its German offshore capacity to other bidders informally, and BP has restructured its offshore unit and closed offices in Berlin and Hamburg amid similar cost pressure. Wind industry group BWE has also pressed for “clear transition rules” for this cohort specifically, alongside its broader call for indexation of costs between bid and commissioning — a gap it says would otherwise leave Germany as the only major European offshore market without such protection.
Germany expects the first tender under the new two-stage system in 2027, with the first CfD-supported projects reaching commercial operation from 2032 onward — timing that keeps the pressure on unresolved 2023–2025 awards, which will have to find a path to financial close under the old rules or wait for lawmakers to create the exit mechanism industry is asking for.
