Key Developments in Clean Energy Auctions

THE WORLD’S FIRST INDUSTRIAL ELECTRIFICATION AUCTION: The European Commission has published the final Terms & Conditions for the first EU-wide Innovation Fund pilot auction to decarbonise industrial process heat — backed by a €1B budget. This is a pivotal move to scale electrification and direct renewable heat in industry and a concrete step toward the Industrial Decarbonisation Bank. Key features: - Targeting a major emissions source: Process heat is one of the largest contributors to industrial CO2, powering high-temperature operations in chemicals, steel, cement, food & bev, glass, paper, and more. - Tech scope is broad: Eligible solutions include electrified heat (industrial heat pumps, electric boilers, resistance heating, induction, plasma torches), direct renewable heat (solar thermal, geothermal), and hybrid systems. - Results-based support: Successful bidders receive a fixed premium subsidy per tonne of CO2 directly abated, for up to 5 years — de-risking capex decisions and narrowing the cost delta vs. fossil-fired heat. - System-friendly design: The rules encourage flexibility measures that shift load away from peak hours, aligning decarbonisation with grid stability and affordability. - Open to all sizes and sectors across the EEA: From retrofits in existing plants to greenfield lines, scaling bankable projects becomes more feasible. - Timing: The auction is expected to open in early December 2025 — giving developers a short runway to finalise configurations, partners, and M&V plans. Strategic impact: - Accelerates industrial competitiveness by lowering exposure to volatile fossil fuel prices and carbon costs (EU ETS). - Strengthens energy security and affordability through electrification and locally available renewables. - Builds a pipeline for the future Industrial Decarbonisation Bank, signalling durable public support for clean heat at scale. https://lnkd.in/eV5FK-4s

Denmark & Norway announce new rules for forthcoming #wind #offshore #auctions, taking lessons from previous auction rounds into account. 🇩🇰 𝐃𝐞𝐧𝐦𝐚𝐫𝐤 Denmark‘s historically large 3 GW auction in December ended without any bids. With comparably low (wind-capture) electricity prices in Denmark, significant cost increases and supply chain challenges, project developers were not willing to pay money to the government for the right to building a wind park (that didn't have grid connection). See this December post for more explanation: https://lnkd.in/eXWBJrND. Now on Monday the government and a broad political group of parties have entered into an agreement on re-tendering of 3 GW of offshore wind, explicitly addressing some of the key previous issues (with thanks to Jonas Hannane): 🔸 Most importantly, project developers will be able to bid for government support in the form of a 20-year two-sided Contract for Differences (#CfD), guaranteeing a stable revenue stream that make investors return largely independent from future electricity price risks. Denmark foresees a capability-based CfD that pays the premium per MWh electricity that could have been produced, rather than for actually produced electricity as in energy-based CfDs such as in Belgium, Norway or the UK (we explained the difference in this webinar: https://lnkd.in/eZSRzuAM). 🔸 Three sites with 1 GW each in North Sea Mid, North Sea South and Hesselø to increase competition, plus the opportunity of overplanting e.g. with #hydrogen or PtX. Costs for site investigations & surveys are borne by the Danish state. 🔸 More flexibility on timelines to achieve min capacity (North Sea Mid & Hesselø: 2032; North Sea South: 2033), acknowledging supply chain challenges. Relaxed penalties for delays and exit, reducing risks for investors (but possibly also realisation probability). 🔸 Sustainability & EU supply chain conditions, but auction awarded on a price-only basis. 🔸 No more requirement of state ownership that may have shied away investors in the previous round. 🇳🇴 𝐍𝐨𝐫𝐰𝐚𝐲 Equally on Monday, the Norwegian government launched another offshore tender with significant changes: 🔹 Focus on floating offshore wind (Utsira Nord site with up to 500 MW), acknowledging Norway's deep waters being tricky for fix-bottom wind parks. 🔹 Two-step process, similar to the UK: Step 1 selecting project developers on qualitative criteria that get the right to develop the site and to compete for government support in the form of a direct grant (rather than a CfD as in the previous auction) in Step 2. So two very different approaches to the current challenges in wind offshore development...

Remarkable outcome in the latest UK renewable energy auction #AR7: 8.4 GW awarded to new offshore wind. The blended average strike price for fixed-bottom offshore wind of £90.91/MWh is a decent result, only modestly above last round’s winning prices, and 40% lower than new gas-fired plants (according to UK government estimation). This is especially notable given today's conditions on supply chains and financing cost the sector is experiencing. Interestingly, the government almost doubled the offshore budget (from £900m to £1.79bn) to capture more good‑value projects—helping accelerate the build‑out and demonstrating a pragmatic use of CfD flexibility. The CfD design was updated in this round to provide 20 years of support (instead of 15 years) to strengthen investor confidence in a higher‑cost environment. Other key elements, such a full strike price indexation and using the GB day‑ahead as direct reference price, remained in place. 🔗 Government announcement: https://lnkd.in/epkK9sEQ #OffshoreWind #CfD #EnergyPolicy #UKEnergy #Renewables

The recent Solar Energy Corporation of India (SECI) auction for 1,000 MW solar energy combined with 4,000 MWh battery energy storage has set a new benchmark with a blended tariff of ₹3.53 per kWh. This achievement underscores the affordability and viability of solar-plus-storage solutions as a mainstream power source. Key Highlights: Tariff Structure: The tariff accounts for a mix of 40% daytime solar power at ₹2.5 per kWh and 60% nighttime battery-stored power at ₹5 per kWh, averaging out to ₹3.5 per kWh. This is significantly cheaper than coal power, which costs ₹4.5 per kWh. Cost Competitiveness: By combining the low cost of solar power with the reliability of battery storage, the blended price positions solar-plus-storage as a strong alternative to fossil fuels. Benefits to India’s Energy Sector: Climate Action: Solar-plus-storage addresses the intermittency of renewable energy, ensuring a stable and reliable power supply while reducing greenhouse gas emissions. Economic Edge: The declining costs of solar and battery technologies make renewable energy affordable, boosting investments and job creation. Energy Security: These systems provide grid stability and round-the-clock clean energy, reducing dependence on conventional power plants. A Game-Changer for Clean Energy The SECI auction highlights the potential of solar-plus-storage systems to transform India’s energy landscape. These systems now rival conventional power plants in reliability, while offering a cleaner and more sustainable solution. The consistent drop in costs promises an even brighter future for renewables. This milestone reflects India’s commitment to renewable energy targets and climate goals. With further auctions and advancements, solar-plus-storage solutions are set to drive India’s transition to a sustainable and resilient energy future, delivering affordable power for all.

The beginning of the year is usually characterised by both looking back and looking forward. I would like to do this in a special way for offshore wind auctions. At the end of last year, the failed auction in Denmark for 3 GW of tendered offshore wind capacity may have been disappointing but it was not surprising: no bids were submitted. Which is a reason for concerns. This can and must be a wake-up call for all tenders in 2025. High inflation, rising interest rates, and a supply chain stressed almost to the max have exposed the limitations of outdated auction designs. The recent Danish auction dramatically highlighted the need for frameworks that provide viable investment signals. Striking a balance between cost-efficiency for consumers and economic viability for developers is now urgent. By the way: both can be helped by eliminating negative bidding. Key elements for successful offshore wind auctions in my opinion include: ▪️ Clear, front-loaded auction schedules and volumes in line with demand and infrastructure for green energy. ▪️ Inflation-linked, two-sided Contracts for Difference (CfDs). ▪️ Single-step dynamic, descending clock auctions. ▪️ Transparent pre-qualification criteria. ▪️ Avoiding negative bidding for sites. The Danish auction’s failure underscores the risks of ignoring market dynamics, while successes with inflation-indexed CfDs in the UK, France and other markets in the EU demonstrate a path forward. By adopting innovative auction designs, we can unlock investments, create jobs, and let local communities benefit. Let’s make 2025 the turning point for offshore wind auctions.

India’s wind sector has quietly crossed an important milestone. And the reason it matters goes beyond one good year. India regained its position as the world’s third-largest #windenergy market in 2025, behind China and the United States. India has moved away from stand-alone wind tenders to complex renewable energy auctions that combine wind, solar, and battery storage. These bids often require oversizing and round-the-clock supply commitments. In 2024 alone: - Nearly two-thirds of auctioned capacity came from these complex tenders - Total clean energy auction volumes reached around 60 GW This matters because wind is no longer being added in isolation. It is being integrated into the grid in a way that matches demand patterns and improves reliability. As hybrid and RTC projects move from awards to commissioning, they are expected to support over 30 GW of additional wind capacity by 2030. India’s wind turbine orders rose 60% to around 8 GW in 2024, with another 7 GW already secured in 2025. Domestic manufacturers, including Inox Wind Ltd., have steadily strengthened their position as the market scales. This alignment between auctions, grid planning, and local manufacturing is what makes the current phase different from earlier cycles. India’s wind resurgence is not a rebound. It reflects a market that has matured. When capacity addition, transmission readiness, auction design, and manufacturing move together, growth becomes durable. That is the shift India’s #windsector is now making.

🌬️ What does it mean when an oil giant outbids everyone — just to build a wind farm, and pay for the privilege? This week, TotalEnergies secured rights to a new 1 GW offshore wind project (N-9.4) in Germany’s North Sea — and didn’t just offer a price of €0 per MWh. They bid €180 million to the state for the right to sell that power at market rates. 📉 Yes, you read that right: - €18M will go to the German federal government in 2026 - Another €8.1M/year will be paid for 20 years to grid operators - That’s on top of the €5–6 billion it may cost to build the wind farm So why would a company known for oil & gas make such an aggressive move? From my perspective, it’s a strategic recalibration — and a warning signal. ⚠️ Here’s why it matters: - Germany introduced “zero-subsidy auctions” in 2017, but this is the first with true negative subsidies - BWO (Offshore Wind Association) warns the model distorts market economics - Grid connections are delayed until late 2032, making ROI even riskier - And yet: TotalEnergies now has 7.5 GW in Germany alone — the country’s largest offshore wind portfolio 🧠 What I take from this: - Energy majors are buying long-term market positioning, not just megawatts - Offshore wind is becoming a strategic asset class, not just an LCOE game - And the value of “access to grid” may soon outweigh subsidies themselves We analyze decarbonization not as a checklist — but as a shifting balance of risk, timing, and infrastructure. You can’t just count GWh or emissions saved — you have to factor in how and when that clean power reaches the system. This German auction? It’s not just a milestone for renewables. It’s a signal that the era of free market green energy is here — and it comes at a price. #OffshoreWind #EnergyTransition #Decarbonization #Renewables #Germany #GridAccess #ClimateFinance #SQUAKE #CleanEnergy #WindEnergy #MarketSignals #ClimateTech #GHG #ZeroSubsidy #InfrastructureEconomics #TotalEnergies #EnergyMarkets

The European Commission has published further statistics about the first round of the 𝗛𝗲𝗮𝘁 𝗔𝘂𝗰𝘁𝗶𝗼𝗻 of the 𝗜𝗻𝗻𝗼𝘃𝗮𝘁𝗶𝗼𝗻 𝗙𝘂𝗻𝗱 (#IF25Heat): https://lnkd.in/er_VEbCp. The 85 projects that applied requested a total of 1.4 Bn€ in grants value, thus exceeding by 40% the available funding. All 3 buckets were oversubscribed - the most competitive category being the 100°C - 400°C > 5 MWth (oversubscribed +90%), followed by 100°C - 400°C from 3 to 5 MWth (+50%). The majority of the projects are based on electric boilers, while heat pumps were included in estimated 10 projects out of the 85. Interestingly, the 3-5 MWth bucket has resulted into relatively high prices in €/ton of CO2. Indeed, 18 projects even at the maximum allowed of 4.9 MWth represent about 90 MWth, which is the equivalent of 90 000 tons of CO2/year (considering 6 000 h/year due to the 70% limit for projects without storage; and a standard conversion factor of 0.17). Over 5 years, this results into 450 000 tons of CO2 - or about 𝟱𝟬𝟬 €/𝘁𝗼𝗻 𝗼𝗳 𝗖𝗢𝟮 to reach the total requested finding of 229 M€. The above assumptions might be somewhat adjustable (more running hours, less capacity, higher conversion factor for removal of a fossil-based boiler, etc.), but this average is still the equivalent of an abatement cost of 2 500 €/ton of CO2. That is more than enough to cover 100% of the turnkey Capex of an industrial heat pump installation - and benefit from the Opex savings typically resulting from a COP above the expected electricity-to-gas price ratio in 2030 (incl. ETS). The explanation for such high auction prices is that electric boilers and other types of resistive heating come with a COP of 1 - therefore resulting into much higher Opex than companies are currently paying for producing steam and superheated water with natural gas. This increased Opex over 5 years is bundled in the auction price - on the top of Capex. The conclusions is that most probably all 10 projects including heat pumps will be among the winners - as their Total Cost of Ownership (TCO) over 5 years is significantly lower than the one of direct electrification technologies, such as electric boilers. However, developping a basic design for a highly efficient industrial heat pumps project requires several months - to collect data, correlate sources and sinks (ideally using Pinch methodology), apply desteaming and size the adequate hot water storage to benefit from flexible pricing. Unfortunately, the timing of the first round of the auction was too short for most companies (final T&Cs were published in October 2025 for an application in February 2026). If the heat auction is repeated and the T&Cs are published during the summer, industrial high-temperature heat pumps should be more present - much more! - in the next round in both buckets from 100°C to 400°C.

Kuwait has just launched a major 0.5 GW solar tender — a significant step forward for the country’s clean-energy transition. This new 500 MW project signals strong momentum in the region as governments push to diversify power generation, reduce reliance on hydrocarbons and attract global developers into competitive renewable programs. For EPCs, OEMs, advisors and investors, this tender represents a real opportunity: • Large-scale capacity (one of the region’s bigger solar launches this year) • Strong demand for experienced developers who can deliver reliably in Gulf conditions • Growing emphasis on grid integration, land optimization and long-term O&M capability • A clearer pathway for Kuwait to expand its renewable energy mix It’s another sign that the Middle East continues to accelerate utility-scale solar — and that the door is wide open for companies who can bring technical excellence and competitive pricing. Do you think we’ll see more Gulf nations release similar large-scale tenders over the next 12 months?

What does Clean Power by 2030 mean for the size of the renewable energy auctions this year and next? 👇 It means they are going to dwarf anything previously seen. New analysis from Cornwall Insight shows last year's auction bought us 5GW offshore wind, 0.9GW onshore wind and 3.3GW solar. Building new renewable assets takes time. If we want assets to be operational by 2030 we will likely have to contract them in the next two years. This means we will need to contract a comparatively large amount in this year and next year's renewable auction - up to 20GW of offshore wind, 7GW-8GW of onshore wind and 23GW-24GW of solar PV across both years. That's more than double the run rate of last year's auction - an auction which was allotted the highest-ever budget for a funding round. Expect renewable auctions in 2025 and 2026 to be backed with significant funding from government therefore. A lot of eyes will be on just how much that funding is when details are announced later this year. Data via Cornwall Insight, chart via me. #renewables #energy #energytransition #wind #solar