Solar Energy completely Wipes out Wind Energy in RE Auctions in Germany

Many countries such as Brazil, Germany, etc. have combined renewable energy auctions of both wind and solar energy to get the cheapest prices for green power generation instead of going for separate auctions for solar and wind energy. This gives them greater optionality and variety in terms of load generation and prices. However, solar energy’s sharp technological improvement and cost cuts have started edging out wind energy even through wind power technology has seen sharp cost cuts over the last ten years but not as sharp as solar energy.

The technological and cost edge of solar energy vs wind energy could be clearly be seen in the German auction when more than 200 MW of solar power capacity was won by solar developers leading to a complete wipeout of wind energy which could not wind a single megawatt of capacity. Even a previous auction of solar energy had led to more than 500 MW of solar capacity getting winning bids with wind energy failing to get a bid.

Solar energy is now being sold in Germany for just 5 cents a kWh which is really cheap considering that Germany receives poor radiation from the sun as compared to say a tropical country like India. However, even in countries with poor solar insolation, solar energy has become a very cheap source of power even cheaper than coal. Germany is also thinking of relaxing its 52 GW cap on overall solar capacity in the country as solar energy capacity surges due to the sharp fall in costs making its price on par with that of other power sources. Germany is well on its way to energy transition to becoming a completely renewable energy country. The country has come a long way from being a pioneer in the solar energy generation space and had been one of the key factors in pushing solar energy around the world with its generous subsidies leading to the scale in solar manufacturing which ultimately led to the positive feedback loop of lower prices, higher demand, greater scale, and even lower prices.