Offshore wind energy is a key component of Germany’s energy transition. The Offshore Wind Energy Act (WindSeeG) sets ambitious expansion targets: at least 30 GW by 2030, 40 GW by 2035 and 70 GW by 2045. Currently, around 9 GW of offshore wind capacity is installed in Germany. To achieve the 2030 target, a further 21 GW would have to be connected to the grid within a few years which is an ambitious expansion path given the current market conditions.
The fact that the market is under increasing pressure was recently evident in the tendering rounds for the allocation of offshore wind areas. In the June 2025 tendering round for areas that had not been centrally pre-examined, two bidders declared that they could realise their projects entirely without government subsidies. This triggered the “dynamic bidding process,” in which the award is determined by payments to the state. However, the final award value of 180 million euros – around 180,000 euros per megawatt – already marks a decline compared to previous years. For comparable areas in 2024, bidders were still willing to pay around €1.3 million and €1.1 million per megawatt, respectively. For centrally pre-examined areas, maximum values of up to €2.07 million per megawatt were even achieved in 2023.
The trend became even more apparent in the subsequent tender round in August 2025: not a single bid was received for the centrally pre-examined areas N-10.1 and N-10.2 in the North Sea – together 2,500 MW – that were put out to tender there. As a result, only 1 GW could be awarded in 2025 instead of the planned 3.5 GW.
This first zero round in the history of offshore tenders in Germany shows that the location is currently associated with uncertainties for many market players. The industry had already pointed out existing challenges beforehand. Against this backdrop, BWO, BDEW, VDMA Power Systems and the offshore transmission system operators 50Hertz, Amprion and TenneT recently published a joint industry statement (10 November 2025) summarising key areas for action and reform proposals for the coming months. The statement ties in with existing industry demands and highlights the issues that are currently the focus of attention. It thus provides a fitting opportunity to take a closer look at the core problems and challenges in offshore expansion that have been identified so far.
Core problems
Unattractive tender design
The current tender design is considered one of the biggest obstacles. The combination of uncertain revenues due to fluctuating electricity prices and highly competitive payment mechanisms in the dynamic process leads to high upfront financial investments and more overall risk for investors. This results in an environment in which projects are difficult to calculate reliably and financing is becoming increasingly complex. For the current tender design and alternatives, please refer to our article.
Shadowing effects
Shadowing effects between neighbouring offshore wind farms are also becoming an increasing problem. The high spatial density of the planned areas creates so-called wake effects, which cause projects to cut off the wind from each other, thereby reducing their full-load hours. These yield uncertainties make it difficult to perform reliable profitability calculations. Together with revenues that are difficult to calculate, they are therefore often cited as a factor that slows down investment decisions.
Rising project and financing costs
At the same time, costs are rising along the entire value chain: material prices, logistics and installation costs, and operating and service expenses have all increased in recent years. In addition, interest rate developments are making it more difficult to finance capital-intensive infrastructure such as offshore wind. These developments are often cited as additional factors currently slowing down expansion.
Infrastructure, permits and supply chains
Another relevant aspect concerns offshore infrastructure and downstream connection to the electricity grid. Ports, manufacturing capacities, specialised ships and installation logistics are already operating at high-capacity limits in many places, which makes the implementation of additional projects more challenging.
Added to this are lengthy approval processes and bottlenecks in grid connection, as the example of Borkum Riffgrund 3 shows: the approximately 913 MW offshore wind farm was largely constructed in 2024 and is technically ready for operation but cannot currently feed electricity into the grid due to the grid connection not yet being completed. This situation is not expected to be fully resolved until 2026.
Proposed solutions
Reform of the tender design
In their latest paper, the industry associations see a new tender design as the key lever. The focus is on the introduction of bilateral contracts for difference (CfDs). These are intended to enable stable revenues, lower financing costs and reduce market price risks. The associations also advocate postponing the next round of tenders in 2026 to the fourth quarter of 2026 to implement the reforms in an orderly manner and give investors sufficient time to prepare. They also emphasise that purely market-based models based on power purchase agreements (PPAs) are not sufficient under current conditions to ensure the necessary expansion. CfDs should therefore become the new standard, without completely ruling out PPAs.
No focus on capacity expansion
The associations are also calling for more strategic planning that does not focus solely on installed capacity. Instead, greater consideration should be given to realistically achievable energy yields, wind conditions and wake risks. This includes minimum planning distances and better cross-border coordination, especially with countries that have larger and less densely populated offshore areas.
Extension of implementation deadlines and permit terms
The associations also emphasise that the expansion of offshore infrastructure will only be effective if implementation deadlines are adjusted to reflect reality. To this end, they propose that proof of operational readiness should in future only be required 12 months after grid connection (instead of 6 months as is currently the case) to realistically reflect technical commissioning in coordination with transmission system operators. In addition, graduated sanctions should be introduced so that delays do not automatically lead to the withdrawal of subsidies.
In addition, the associations advocate extending the approval period to 35 years so that wind farms can be operated for longer and the existing infrastructure can be used more comprehensively throughout its life cycle.
Outlook and conclusion
Without appropriate political adjustments, there is a risk that offshore expansion in Germany will lose momentum, and the associations’ proposals are therefore to be welcomed. A bundle of measures is needed to return to the planned expansion path and achieve the legally defined targets by 2030 and beyond. The key solutions are already in place, as outlined by the associations: an enhanced tender design to ensure reliable investment conditions, more efficient approval and grid connection processes, and land-use planning that is more focused on yield and system integration.
Whether Germany achieves the necessary progress in the offshore sector now depends on how politicians respond to the current proposals and translate them into concrete steps. Postponing the next major round of tenders until the fourth quarter of 2026, including the 2.5 GW deferred from the 2025 zero round and the 3.5 GW regularly scheduled, could help reduce the risk of further unsuccessful tenders and allow time for a review of the framework.
The coming months will show to what extent the proposed adjustments will be implemented and whether offshore expansion in Germany can develop the momentum necessary to achieve national and European expansion targets.
