German biogas auction undersubscribed again, leaving many plants without support

Germany's Federal Network Agency (Bundesnetzagentur), which oversees the energy market, has released the results of its October auction for biomass and biogas plants under the Renewable Energy Sources Act (EEG). In these auctions, plants compete for the statutory support for electricity generation. The outcome shows that willingness to invest in the bioenergy sector remains low, and industry representatives are pressing for changes to the law.

Fewer bids than capacity on offer

The auction offered 617 megawatts (MW), but only 328 bids with a combined capacity of 442 MW were submitted. Even so, not every participant received an award: 244 bids with a total capacity of 319 MW were successful.

The reason is the so-called endogenous volume control. When an auction is undersubscribed, this mechanism excludes the highest 20 percent of the submitted bid volume from receiving an award. The already small volume of bids was therefore reduced further.

Criticism from the sector

Sandra Rostek, head of the Hauptstadtbüro Bioenergie (HBB), a bioenergy lobbying office in Berlin, sharply criticises the mechanism. In her view, it removes valuable capacity from the German energy system, unsettles investors and worsens the situation at a time of tight energy supply.

Rostek says the undersubscription came as no surprise to the industry. According to her, the current law gives much of the sector too little incentive to invest in economically viable plant concepts. Many operators are therefore waiting for the outcome of the ongoing EEG amendment. The associations within the HBB believe that impractical requirements for plant operation in particular prevent investment.

Demands for the reform

The bioenergy associations want operators to have more entrepreneurial freedom. A key point of criticism is the so-called maize cap (Maisdeckel), which they consider technically unjustified and want abolished. They also say the law must be better designed for smaller plant concepts to improve their economic prospects.

Rostek stresses that the planned entry into force of the new law in early 2027 must not be put at risk. In her view, biogas and wood contribute to security of supply and can bridge periods when wind and solar plants produce little electricity.