Germany Rewrites Its Offshore Wind Law With Contracts for Difference and 35-Year Lives
The reform follows a 2.5 GW North Sea tender that attracted no bids at all last August
Germany's cabinet has approved a major rewrite of the country's offshore wind law, introducing contracts for difference and extending the standard operating life of projects from 25 to 35 years, as Berlin looks to revive investment in a stalled development pipeline.
The federal government approved the amendment to the Wind Energy at Sea Act on 2 September, saying the new framework would put greater emphasis on affordability, investment security and reducing the overall cost of offshore wind development.
The central change is the introduction of two-sided contracts for difference. Under that mechanism developers receive protection below an agreed electricity price, while revenues above it are returned. It replaces a negative-bidding model under which developers paid for the right to build and carried the full merchant price risk afterwards, an arrangement industry groups argued was putting the next wave of projects at risk.
Extending standard operating periods by a decade works on the same problem from the other end, spreading capital cost across more revenue years. The legislation also provides for changes to offshore grid planning intended to coordinate generation and transmission capacity more closely.
Germany will additionally incorporate resilience and cybersecurity criteria under the EU Net-Zero Industry Act, aimed partly at reducing dependence on single third-country supply chains. Existing offshore wind expansion targets remain unchanged.
The reform follows sustained pressure on Berlin to overhaul its auction regime. A 2.5 GW tender for the N-10.1 and N-10.2 North Sea sites attracted no bids in August last year, prompting the government to postpone their re-auction until 2027. Germany had reached 10.8 GW of installed offshore wind capacity by July, while another 17.5 GW of awarded projects had yet to reach final investment decision.
For the marine contracting side, the revenue framework governs when installation work is actually booked. Vessel owners commit offshore vessel capacity years ahead of the campaign, and a project that cannot reach financial close does not charter anything. The cabinet approval is the first time the proposed reforms have cleared the federal government, moving the reset beyond the consultation draft published in August.
