The head of RWE’s offshore wind unit urged policymakers on Wednesday to reevaluate how they define success in renewable energy auctions, cautioning that project viability should be measured by reaching a final investment decision (FID), not just by award announcements.
Speaking at the WindEurope conference, Sven Utermöhlen, CEO of RWE Offshore Wind, noted that while recent allocation rounds have been labeled “successful,” many winning bids may not materialize into operational wind farms.
“I want to pour a little water into the wine,” Utermöhlen said. “Only when projects actually reach FID can an auction be truly considered successful.”
Utermöhlen raised concerns about the economic feasibility of several recent auction outcomes, citing a combination of elevated supply chain costs, rising capital expenses, and merchant price risks that have deterred investors and contributed to a lack of participation in some bidding rounds.
“It’s because the business cases don’t work,” he added, emphasizing that these financial hurdles undermine confidence in delivering the projects.
To address the challenge, he advocated for broader adoption of Contracts for Difference (CfDs), a policy mechanism designed to provide revenue stability and reduce investor risk.
The comments come as European governments aim to accelerate offshore wind deployment to meet climate goals, even as the sector faces financial and logistical pressures.
