Ørsted CEO calls Germany's draft offshore CfD regime long overdue

Ørsted chief executive Rasmus Errboe has welcomed Germany's proposal to introduce two-sided contracts for difference (CfDs) for offshore wind, saying it is "about time" Berlin moved to two-way support^[1]. The comments came as Germany's Federal Ministry for Economic Affairs and Energy (BMWE) opened industry consultation on 10 August 2026 on a draft amendment to the Wind Energy at Sea Act (WindSeeG)^[1].

What the draft proposes

The draft WindSeeG amendment, published on 10 August 2026, retains Germany's target of at least 70 GW of installed offshore wind capacity by 2045 and proposes annual tenders ranging from 2,000 MW to 4,800 MW, replacing the current fixed 4,000 MW annual target. Key changes include:

• Introduction of two-sided CfDs as a support mechanism
• Extension of the standard operating period for new offshore wind farms from 25 to 35 years
• A two-stage auction design that first tests whether developers will build without support
• Establishment of opportunities for cross-border offshore wind projects

Under the two-stage structure, CfD support becomes available only where no bidder is willing to proceed at the opening bid price - in other words, only if no developer is prepared to go merchant. Stage two then runs a descending auction for the lowest applicable strike price under the two-sided CfD.

The draft also confirms that no offshore wind auction will take place in 2026, following converter platform delays at sites N-10.1 and N-10.2 and the government's decision to suspend that round.

Why the reform is needed

The urgency of the redesign is not in doubt. A 2.5 GW tender for the N-10.1 and N-10.2 sites attracted no bids in August 2025, exposing the limits of Germany's existing merchant-first auction model at a time of elevated financing costs and supply-chain pressure. Germany added 1.1 GW of offshore wind capacity in the first half of 2026, taking its installed fleet to 10.8 GW - well short of the pace needed to reach 70 GW by 2045.

Industry associations had been calling for CfDs for years, arguing that the mechanism reduces financing risk, improves project bankability, and supports more stable electricity costs for industry and consumers.

Industry split on the design

The German Offshore Wind Energy Association (BWO) welcomed the inclusion of CfDs but drew a clear line on the proposed structure. The association argued that CfDs should be available from the outset as part of the tender design, not deployed only when projects cannot proceed without support. BWO said the consultation closes at 10am on 17 August 2026.

"With the CfD, the draft takes an important step in the right direction," BWO managing director Stefan Thimm said, while insisting that support should not become a fallback option and that the auction design should make risks manageable rather than reward those prepared to take the greatest risks.

BWO also criticised the draft for not including a mechanism allowing projects awarded in the 2023-2025 tender rounds to be returned to the government and re-tendered - a gap that leaves stranded-project risk unresolved.

Ørsted's stake in the German market

Ørsted has significant exposure to Germany. Borkum Riffgrund 3, at 913 MW, is Ørsted's largest offshore wind farm in Germany, and its commissioning in Q1 2026 brought the company's total installed offshore wind capacity in Germany to around 2.5 GW. The project was built without a CfD, relying instead on long-term power purchase agreements with Amazon, BASF, Covestro, REWE Group, and Google.

Ørsted generated 11.2 TWh of electricity in its offshore business in H1 2026, 23% more than in the same period a year earlier, and the company is on track to deliver full-year EBITDA above DKK 28 billion.

The next German offshore auctions are now scheduled for 2027. Whether the CfD mechanism arrives as a genuine first-stage option or remains a backstop of last resort will determine how much of the 17.5 GW of awarded-but-unfinalised German pipeline actually reaches final investment decision.