The Uptime News Flash is a short form podcast to discuss wind energy mergers, acquisitions, and partnerships. This week in the news Joel Saxum and Allen Hall discuss Germany's dynamic bidding process for offshore wind, CS Wind acquiring Bladt Industries, and Vestas moving their Asia Pacific headquarters to South Korea.



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News Flash 17 July 2023



Allen Hall: I'm Allen Hall, president of Weather Guard Lightning Tech, and I'm here with the Vice President of North American Sales for Wind Power LAB. Joel Saxum, we're the host of the Uptime podcast, and this is your newsflash. First up, Germany's first dynamic bidding process for offshore wind zones has generated 12.6 billion euros in proceeds.



The auction received several zero subsidy bids for the three North Sea areas and one Baltic sea area leading to a dynamic bidding stage. Now, this, Joel, this is unusual for Europe. In, in America it's, it's as commonplace, but. Zero subsidy bids are a problem for the industry,  right?



Joel Saxum: Oh, it says that the costs are either gonna be passed on somehow, right?



They're gonna be passed on through the supply chain, which is kind of already struggling or to the consumers, right? So at the end of the day, someone has to pay for non subsidy wind. Like if you look at wind in the us, you're say, if we did away with ptc, well, it makes these projects not that feasible unless PPA prices rise, which eventually.



Passes that cost on the consumer. So the same thing with these bids going here offshore in Germany. They're not, there's no subsidies at the round that ended up winning these bids. So all of those costs must be in a tra basically a traditional business model passed on to someone.



Allen Hall: The real trick here is are are they gonna continue on with this process?



Cause I think the industry wants not to do this. I think when Europe put out a statement earlier this week saying they would prefer not to go down this pathway and, and these. Zero subsidy. Bids need to stop. But I think the countries in Germany, one of them I think. Other countries would like to have some cash right now.



And so this is an easy way to get it. It just skews a marketplace.



Joel Saxum:  Yeah, I mean if you read any of the press releases, one of the big, not one of the biggest offshore offshore wind player in the world, Ted, they backed outta the auction. Now we don't know when they backed out of it at what stage, but at some stage they backed out.



And there is a part of a press release from Reuters that says earlier this year, Nipper, who's Mads Nipper, the CEO of Orsted had warned against. The German pricing model for the auction saying it could ultimately raise cost for consumers. So that's the, the, you know, Orsted backed out when they saw the prices getting too high.



They don't want to be, you know, a part of a, something that is an upside down business model before you even start. And, you know, in US dollars, this 14 billion euros for seven gigawatt, or 14 billion US dollars for seven gigawatts of of space in the ocean is a, that's a lot of money.



Allen Hall: Orted is playing it close to the best.



You see that happening in the United States at the moment on the East Coast, and now you're seeing it over in Germany, and rightly so, they're pretty smart at what they do.