The offshore wind industry is seeking state-guaranteed electricity revenues. Eight state premiers support these demands, following a situation where investors have begun to question the viability of projects and several tenders have failed. Rising construction costs, uncertain electricity prices, and delays in grid connections are putting multi-billion-euro wind farm projects at risk. Consequently, there are calls for the state to assume a portion of the economic risk. At the same time, the offshore grid levy for consumers is set to increase by 21.5 percent in 2027. Furthermore, even unused grid connections could end up costing electricity consumers approximately 100 million euros annually.
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The Myth of Subsidy-Free Wind Power
For years, politicians and the wind power industry touted individual “zero-cent” bids as proof of the economic superiority of renewable energy, claiming that new wind farms would no longer require any subsidies. EnBW, for instance, took particular pride in its “He Dreiht” wind farm, for which it secured the contract in 2017 without any support under the Renewable Energy Sources Act (EEG). In September 2026, policymakers celebrated the inauguration of the €2.4 billion project. However, the project’s revenue is secured by long-term private power purchase agreements (PPAs). While such a contract does not constitute a state subsidy, this model cannot be applied universally.
Recent tender processes reveal how quickly this supposed success story falls apart. As recently as 2023, BP and TotalEnergies collectively bid €12.6 billion for four offshore sites. Since then, however, several of these projects have been called into question due to shifting economic conditions. In June 2025, the highest bid for another site dropped to €180 million. In the subsequent auction in August 2025, there were no bidders at all. Consequently, the German federal government suspended tenders for 2026. Ultimately, those much-celebrated zero-cent bids have proven to be an unreliable benchmark for new wind farm projects.
Offshore wind power suddenly demands state price guarantees again
The very industry representatives who spent years highlighting the move away from subsidies are now calling for new state-backed safeguards. The proposed “contracts for difference” (CfDs) are intended to guarantee operators a predictable electricity price. If the market price falls below this level, the state covers the difference; conversely, if market prices are higher, the operator must remit the excess revenue. In effect, however, this shifts a portion of the price risk onto the public purse—meaning there can no longer be any talk of a model based entirely on independent, market-driven financing.
What is particularly striking is the political support for this about-face. Eight state premiers, alongside industry associations, are jointly demanding sweeping changes to the competitive bidding process. The federal government intends to first assess whether investors are willing to build without subsidies before implementing contracts for difference. The Bundesrat (Federal Council) and offshore industry associations, however, want to scrap this “market test” altogether. This would transform state price guarantees from a potential safety net into a standard business model. Why should policymakers abandon the prospect of subsidy-free competition before it has even had a chance to take place?
Even unbuilt wind farms can cost millions
Another cost trap lies in grid connectivity. In early November, transmission system operator TenneT warned of the significant financial consequences of failed offshore projects. Preparations for grid connections are already underway for wind farm sites with a combined capacity of 16 gigawatts. If final investment decisions are never made, the result could be stranded infrastructure and ongoing costs. According to TenneT, this could burden electricity consumers with approximately 100 million euros annually. This would represent a particularly costly outcome of the current expansion policy: billions invested in grid connections for wind farms that might never supply a single kilowatt-hour of electricity.
Yet, consumers are already paying for this offshore infrastructure through their electricity bills. The offshore grid levy will rise from 0.941 to 1.143 cents per kilowatt-hour in 2027—an increase of 21.5 percent in a single year. Since 2023, this levy has nearly doubled. Consequently, the costs for grid connections have long been borne by electricity consumers, even though some individual wind farms operate without EEG (Renewable Energy Sources Act) subsidies. For this reason, describing the entire offshore system as “subsidy-free”—a term frequently used—is misleading.
After Decades of Subsidies, Another Round of State Support
These economic problems come as no surprise. Higher financing costs are driving up the price of new installations, while neighboring wind farms end up competing for the same wind. At the same time, large volumes of solar power occasionally push down market prices, reducing the value of any additional electricity generated—especially during hours when supply is already high. Nevertheless, policymakers are sticking to their target of 70 gigawatts of offshore wind capacity by 2045. Furthermore, the federal government intends to extend the standard operational lifespan of new wind farms from 25 to 35 years—a move designed to make investments viable that are becoming increasingly difficult to justify under current conditions.
After decades of state support for wind energy, the industry should long since have been able to convincingly demonstrate its own economic viability. Yet, instead of systematically phasing out support mechanisms, the sector is once again demanding government guarantees. Even the Association of German Chambers of Industry and Commerce (DIHK) has criticized this trend, opposing new offshore subsidies and describing “contracts for difference” as a significant step backward in the transition toward a subsidy-free market. This highlights the fundamental contradiction at the heart of the energy transition: while individual wind farms may occasionally operate without subsidies—serving as proof of market maturity—the state is expected to step in again the moment new projects become unprofitable. Policymakers must stop presenting this business model as fully competitive. After all, a technology does not become economically viable simply by shifting its risks onto the taxpayer.
Author: Blackout News
Sources: Das Parlament (05.11.26) – ZfK (04.11.26) – Deutscher Bundestag (02.11.26) – Netztransparenz (26.10.26)