30.11.2020 | Volkswind success at auctions in France

Strong tailwind for Axpo

In France awards for the construction of wind power plants takes place by means of auctions. The Axpo subsidiary Volkswind is demonstrating its strength here. The company cinched a solid 27 per cent of the tendered volume in the first round of auctions in 2020. As a result, Volkswind can continue to follow its strategy of profitable growth in the area of renewable energies.

France is an attractive country for wind power plant developers. Firstly, wind conditions are good at many potential locations – not only for offshore, but for onshore plants as well. Secondly, the French government has instituted support programmes for the expansion of renewable energies (see box). Regulatory adjustments were enacted last year. In doing so, France moved away from fixed feed-in tariffs for wind energy and introduced an auction system where the market player offering the best price/tariff is awarded the contract. 

The applicable rules for the auctions have made France the hottest market in Europe for the development of new wind farms. This also holds true for the favourable prices that can be achieved on the market. As a result, lots of developers want to grow here, says Christoph Sutter, Head of Renewable Energies at Axpo: "We have the advantage that we are already in the market with Volkswind. We know this market well and have a large project pipeline in this country.

Number 1 for government tenders

Preparing good offers is the key to success at the auctions. At the same time, clarifications must be cost-effective because you don't know if you will awarded the contract, says Volkswind CEO Katja Stommel.

In the first wind power auctions in 2020, the Axpo subsidiary demonstrated that understands its business. The company cinched a solid 27 per cent of the total auction volume of 749.5 MW, and will be able to realise ten projects with a total capacity of 201.5 MW. The average price awarded to wind power plant developers in this round of auctions was 62.90 Euros/MWh. The second auction scheduled for 2020 was postponed from July to November due to corona.

On course

As a result, the Axpo subsidiary is on a good course for growth with the expansion of its portfolio and ensuring future projects. Overall, Volkswind's plant portfolio increased by over 70 per cent since the take-over by Axpo in 2015. Today Volkswind owns 130 wind power plants with a capacity of 300 MW and manages 143 wind turbines that belong to third parties. The development pipeline holds projects with a capacity of about 3000 MW.

Sales

According to Axpo's strategy a portion of the wind farms developed and built by Volkswind will stay in the Axpo portfolio, whilst others will be sold to investors. No plants were sold in financial year 2019/20. However, that is expected to change next year. Axpo plans to sell various wind power plants with a total capacity of 75 MW.

France, the wind country

Onshore wind power plants with a total capacity of 1336 MW were built in France in 2019. This corresponds to an increase of 8.75 per cent. France currently has wind turbines with a capacity of 16,600 MW. Production increased from 27.8 TWh to 34.1 TWh, representing an increase of 22.7 per cent. This wind power can cover the consumption of some 7 million households.

Like the EU, France intends to combat climate change and has prescribed CO2 neutrality by the year 2050. Accordingly, wind power will be strongly expanded in the upcoming years – both onshore and offshore. In the upcoming years, about 2000 MW of onshore wind power will be developed – a significant increase from today. In 2019, only Great Britain, Spain and Germany expanded wind power on this scale. 

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