Germany awards 5,160 MW of reduced capacity in power auction exceeding 4,500 MW
Key Facts
Germany’s Federal Network Agency said on November 3, 2026, that it had awarded contracts for 11 bids totaling about 5,160 MW of reduced capacity in the first long-term capacity auction, for which bids were due on September 8. The capacity awarded exceeded the auction’s 4,500 MW volume after the agency also included, for the first time, a bid that exceeded the offered volume. The agency said the mechanism aims to ensure the availability of dispatchable capacity in an electricity system becoming more volatile. “Reduced megawatts” form the basis for calculating capacity in the auction and do not necessarily equal plants’ full nominal capacity. The results highlight the scale of generation commitments Germany purchased in this round, as well as the geographic and technical breadth of the winners.
The volume-weighted average award value was €155,296 per reduced megawatt annually, compared with a price cap of €244,000. The agency said intense competition among different technologies, including power plants and electricity storage, helped produce relatively low award values. The average is the price weighted by the size of winning bids, not a uniform price for each project. That puts the cost of buying guaranteed capacity in this round below the maximum set by the auction. Agency President Klaus Müller said competition between power plants and storage facilities “led to relatively low award values.”
The awarded capacity was spread across five German states, with North Rhine-Westphalia leading at about 2,118 MW of reduced capacity across three bids. Brandenburg received about 1,819 MW from four bids, followed by Saxony with about 910 MW from two bids. The results also included Bavaria with about 269 MW from one bid, and Baden-Württemberg with about 45 MW from one bid. Müller said the regional distribution supports secure grid operation. The spread across states shows that the awards were not concentrated in the locations cited in some companies’ previous announcements, but extended to additional regions.
RWE won contracts for three hydrogen-ready plants in Voerde, Weisweiler and Werne, with total reduced capacity of about 2,100 MW. The company put Voerde’s capacity at about 730 MW reduced, while each of the Weisweiler and Werne plants has capacity of about 700 MW. Auction rules count only 85% of the installed capacity of gas plants, explaining the difference between reduced and nominal capacity. RWE Chief Executive Markus Krebber said the plants would provide electricity when wind and solar were not producing enough power, and described the technology as hydrogen-ready. The company plans to begin construction on the first plant within a few weeks, having prepared planning documents for permits, secured manufacturing capacity for key components and begun the approval process.
The auction mechanism requires winners to retain generation capacity and make it available for 15 years in return for annual compensation determined through competition. Eligibility conditions also include technical and location requirements, among them providing instantaneous reserves to support grid stability even when the capacity is not operating. Müller said a more volatile system needs dispatchable capacity able to respond under different conditions. He added that the auction results give the agency assurance that the capacity awarded contracts will be built. The rules require new gas plants receiving support to be equipped to use hydrogen, while the government said all plants funded under the law must be climate-neutral by 2045.
RWE plans to invest about €9 billion in flexible generation, battery storage and hydrogen production by 2031. In a broader context, the German government said the Electricity Supply Security Act aims to meet requirements from 2031, with two additional auction rounds scheduled for 2027 and 2029. Procedurally, the agency said the date of the second round of long-term capacity auctions will be announced on November 10, 2026. The results of the first round will also become legally final on that date, after being published on November 3. These dates place the current round within a broader program of auctions to procure guaranteed electricity capacity in the coming years.