EnergyOMNI's Perspectives｜German BWO Calls For Mechanism For 'Voluntary Return' Of Offshore Sites Not To Proceed

Edited by EnergyOMNI

In May, the German Offshore Wind Energy Association (BWO) called on the German government to establish a new mechanism allowing developers to voluntary return offshore wind sites awarded to developers that they decide not to proceed with, enabling the government to quickly re-tender the sites.

Between 2023 and 2025, Germany auctioned 14 offshore wind sites with a combined capacity of 17.8 GW. According to local media reports, some successful bidders, including JERA Nex BP and TotalEnergies, have lost interest in developing their German projects. Many of these projects have yet to reach a final investment decision (FID), putting investments worth as much as €50 billion (approximately US$58 billion) at risk and creating significant uncertainty for the supply chain.

Germany's industrial union IG Metall urged the government to clarify the relevant rules as soon as possible to prevent these projects from remaining stalled. The union also warned that failure to launch another auction round within this year could have serious consequences for the offshore wind industry.

Amid rising costs, changing market conditions, and uncertainty over grid connection schedules set by Germany's transmission system operators (TSOs), TotalEnergies recently sought to return the seabed lease for Site N-11.2, the planned Nordsee Energies 2 offshore wind project. However, the German government rejected the proposal.

In response, BWO proposed introducing a "voluntary and accelerated return of lease areas" mechanism. Under the proposal, developers that decide not to proceed with a project or fail to reach a final investment decision would be allowed to return their lease areas within four weeks after the new regulations take effect.

The first installment already paid one year after the auction award—equivalent to 10% of the negative bid component—would not be refunded. However, if developers voluntarily return the lease early and cooperate to minimize overall losses, their bid bond or security deposit could be refunded in full.

Once a lease area is returned, the government could hold a special auction in 2027 to reallocate the released sites and capacity. Developers returning a lease would be prohibited from bidding again for the same site and would be required to transfer all existing project data and preliminary study reports to the relevant authorities. At the same time, the federal government and transmission system operators (TSOs) should closely coordinate to adjust project development deadlines and grid connection schedules to ensure projects remain commercially viable and investable.

The objective of the proposed mechanism is to enable the government to promptly re-tender abandoned offshore wind sites, preventing them from remaining idle for years and delaying the country's offshore wind deployment. However, the German government has yet to indicate whether it will adopt BWO's proposal.

Taiwan has likewise experienced cases in every stage of its offshore wind development phase where awarded projects ultimately failed to proceed. Although administrative contracts signed between the government and developers include milestone review mechanisms, developers are generally allowed to apply for extensions. As a result, projects may remain stalled for prolonged periods before a developer formally terminates the contract.

Under Taiwan's Round 3-1 zonal development, the award results announced at the end of 2022 allocated five projects with a combined capacity of 2,335 MW. It was not until early 2026 that several projects that had failed to make meaningful progress—including Haixia Phase II, Haiding II, and Weilanhai Changhua—began terminating their administrative contracts with the Ministry of Economic Affairs (MOEA).

For Round 3-2, the award results announced in August 2024 allocated five projects totaling 2,700 MW. Although all five successful bidders applied to sign administrative contracts with the MOEA in November 2024, only one developer completed the signing process. The remaining developers submitted supplementary documents in February 2025 but still failed to finalize their contracts. Consequently, the MOEA issued a final deadline in early May 2025. Later that month, the Haiding I and Deshuai offshore wind projects lost their development rights after failing to meet the requirements for signing the administrative contracts.

Meanwhile, Shinfox Energy's Youde Offshore Wind Farm, which was awarded 700 MW in Round 3-2, was reported in June to be seeking to withdraw from leading the project's development and could eventually terminate its contract with the MOEA. However, the administrative contract remains in force at present.