Consultation on possible sub-areas in the tendering of SEN-1. Consultation on the delineation of sub-areas of the other energy generation area SEN-1 and on possible staggering over time
The AquaVentus Förderverein e.V. expressly welcomes the consultation initiated on possible sub-areas in the tendering of SEN-1. We recognise in it the sustained efforts of the Federal Ministry for Economic Affairs and Climate Action to take up the suggestions and observations from the market made in earlier consultations and to discuss them further in the interest of a successful hydrogen ramp-up in the German Exclusive Economic Zone (EEZ). Dividing the 102 km² SEN area provided for in the Site Development Plan (FEP) into several individual sites, and the sequential award this makes possible, is a central and correct step towards achieving a rapid and (funding-)efficient market ramp-up for offshore electrolysis. In this respect we refer to our previous statements on the FEP and on the market consultation regarding the key points of the funding directive for offshore electrolysis of January 2023.
A step-by-step ramp-up should enable a learning curve. What is at stake is the first large-scale offshore electrolysis project of its kind, which must succeed despite all planning and technological challenges in order to serve as the basis for further offshore hydrogen production. With the insights from this first project, a technological and organisational learning curve along the value chain should and must begin, allowing follow-up projects to be realised faster and more efficiently with further risk reduction. To this end it is indispensable to tender more than one site in a staggered sequence so that these learning effects can be captured. Tendering several sites simultaneously would prevent the desired learning effect. At the same time, for the reasons stated above, it makes sense to begin with a smaller site in order to reduce risks and to exploit the potential of the learning gained, relative to the time required, on further sites in the gigawatt range as quickly as possible.
Ensuring a diversity of bids and bidders by tendering a smaller site. AquaVentus advocates that a range of providers should make a diversity of bids possible. This diversity of bidders is only ensured by the initial tendering of one (smaller) sub-area on which several potential bidders can concentrate. This intensive competition among developers must lay the right foundation for offshore electrolysis by selecting the best and most promising bid according to the quality criteria of the Ordinance on Other Energy Generation Areas (SoEnergieV). AquaVentus assumes that subsequent tenders will see a reduction in the complexity of planning and coordination processes, which will favour a faster ramp-up of offshore electrolysis. A further prerequisite for creating a lasting learning curve along the entire value chain is therefore that the tenders take place one after another at a measured interval.
Step-by-step expansion secures both funding efficiency and ramp-up speed. It is in the interest of the German economy to deploy the necessary funding efficiently and to be able to structure it degressively in subsequent tenders. Central to this is making the learning effects described usable on the basis of what is learned from the first project. The need for funding is expected to fall significantly once experience from a smaller site enables considerable efficiency gains on later, larger sites. Dividing the site portfolio into several sub-projects also prevents concentration risks in the award of funding and increases the likelihood both of a successful project and of a successful deployment of public funds. AquaVentus sees in the strategy of step-by-step expansion the opportunity to advance into the gigawatt range as quickly and as securely as possible.
Answers to the questions. 1) Do you agree in principle with tendering SEN-1 in sub-areas?
For all the reasons stated, we consider the (staggered) tendering and realisation of sub-areas to be imperative in order to generate the greatest possible diversity of bids and bidders and to limit project risks. This is at the same time necessary for the quality criteria of the SoEnergieV to have a decisive effect in the award of sites.
2) Do you consider one or more variants of the delineation of sub-areas preferable? Please give reasons for your decision.
We consider all variants viable, provided that in each case a first step begins with the tendering of a small site and a second step continues with the tendering of a considerably larger (overall) site. Variants 1 and 2 in particular meet this requirement as presented, given the correct tendering sequence.
3) Should the individual sub-areas be tendered simultaneously in a joint tendering procedure, or do you consider it sensible to tender one sub-area after another? How long should the interval between the respective tenders of the sub-areas be? Please give reasons.
As set out above, we see only in staggered tendering and realisation the possibility, on the one hand, of concentrating the diversity of bidders on a single site to begin with. In this way the quality criteria of the SoEnergieV are applied as intended and enable the most suitable bid to be awarded the contract. On the other hand, the staggered approach described makes the technological and planning-related learning gains usable for further projects. We expect efficiency gains that will at the same time reduce future funding requirements. Furthermore, follow-up projects can be realised more quickly if the learning effects from the first project can be drawn upon across the entire value chain. With regard to the interval between tenders, we recommend that the Ministry orient itself towards the insights and experience of industry, and we consider at least two years to be expedient in terms of the start of tendering and the corresponding start of construction.
We thank you once again for the opportunity to explain the position of the AquaVentus Förderverein in the course of this consultation and remain available for dialogue at any time.