Germany launched its first long-term capacity auction , with a volume of 4500 MW of power and the objective of incorporating resources capable of supporting the electricity system during periods of low renewable generation or high demand.
The German Federal Network Agency (Bundesnetzagentur) has set September 8, 2026, as the deadline for submitting bids. The selected projects will have a 15-year commitment period, a condition designed to provide financial predictability for new investments.
The procedure marks the beginning of a broader strategy to add firm and manageable capacity to the German market. Within this framework, the country plans new tenders for more than 10 GW, while accelerating the integration of wind and solar energy and requiring available resources to cover fluctuations.
The competition will not be limited to a single technology. Official documentation contemplates the participation of power plants and storage systems, although the recognized capacity will depend on each facility's effective ability to respond when the system requires it.
In the case of batteries and other storage facilities , the Bundesnetzagentur will apply reduction factors linked to their maximum supply duration. This means that projects will compete not only on their nominal power output, but also on the number of hours they can sustain electricity delivery.
Thus, a 100 MW storage system will not necessarily receive full recognition of that capacity in the auction. The eligible volume will be adjusted according to the criteria established in the Electricity Supply Security and Provision of New Capacities Act, known as StromVKG .
Longer-duration projects could have an advantage over batteries designed for shorter cycles. The ability to sustain discharge for longer periods will be crucial in calculating the firm power that can be offered and, consequently, the potential return.
The regulation also allows proposals comprised of groups of installations , provided that all assets belong to the same technology class. In such cases, the reduction factor will be calculated using the weighted average of the individual coefficients, according to the nominal power of each unit.
Conversely, manageable loads and groups of small installations will not be eligible to participate in this first call for proposals. The Bundesnetzagentur itself clarifies that these categories are excluded from the long-term capacity procedure.
15-year contracts and a maximum of 244,000 euros per MW
One of the main attractions of the mechanism will be its 15-year contractual horizon . This extension could facilitate the financing of dispatchable power plants, long-term storage, and other infrastructure with high initial costs.
The Bundesnetzagentur (Federal Network Agency) has set a maximum price of €244,000 per MW of reduced capacity per year . Companies must compete below or up to this limit, while the final remuneration will depend on the values submitted by the winning projects.
If the 4,500 MW were contracted at the maximum price, the theoretical financial commitment would amount to approximately €1.098 billion annually . Over the entire 15-year period, the expenditure would reach nearly €16.470 billion.
However, this calculation represents only a reference ceiling . The actual cost could be lower as a result of competition among participants, while the nominal installed capacity could exceed 4,500 MW due to the application of reduction factors.
The call for tenders also includes significant financial requirements . For each bid, participants must provide a guarantee equivalent to 15% of the maximum price, multiplied by the reduced power included in the proposal.
This equates to €36,600 for each MW of reduced capacity offered . A proposal for 100 MW of recognized capacity, for example, would require an initial guarantee of €3.66 million.
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Successful bidders will also be required to submit a performance guarantee within 20 business days of being notified of the result. The amount will correspond to 1.5 times the value of the bid, multiplied by the committed reduced power output.
In addition, there is an administrative fee of €956 per proposal , which must be paid before the closing date of the tender. This fee is non-refundable even if the participant withdraws their bid within the permitted timeframe.
Hydrogen appears among the core requirements
Power plants seeking to compete must submit a concept for their future conversion to hydrogen operation . This document must be written in German and included with the rest of the technical documentation.
This situation positions plants equipped to use hydrogen as one of the alternatives being considered to provide backup for the system. These facilities could initially operate with another fuel and be adapted later as the availability of the energy carrier increases.
However, the requirement also raises questions about conversion costs and timelines . Economic viability will depend on the supply infrastructure, the future price of hydrogen, and the conditions that the awarded assets will ultimately have to meet.
Developers will also need to provide proof of a connection point to the electricity grid or submit a binding commitment from the relevant operator. The connection capacity must be at least equivalent to the nominal power offered and be available before the start of the contract period.
The Federal Network Agency (Bundesnetzagentur) will also require information on the origin of the main components of each installation. Participants must identify the most relevant specific parts and declare the country where they were manufactured.
This requirement incorporates supply chain traceability into the bidding process. In addition to evaluating the technical and economic capacity of the projects, the regulator will have access to information on the origin of the equipment used.
Bids must be submitted exclusively electronically . Companies must register and authenticate their identity on the Bundesnetzagentur's secure communication platform by September 1, 2026 , one week before the deadline.
The award still depends on Brussels
The call for applications was published while the StromVKG had not yet formally entered into force . As of July 21, 2026, the law had already been passed by the Bundestag and had not received objections from the Bundesrat, but its official publication was still pending.
The Bundesnetzagentur decided to maintain the current schedule in anticipation of the law's imminent implementation. The agency clarified that it will not issue a new call for applications once the legislative process is complete.
However, several components of the mechanism require approval from the European Commission under state aid rules . Therefore, the regulator can receive the proposals, but cannot finalize the award until it obtains approval from Brussels.
Companies will prepare their bids at their own risk . The German authority notes that it will not reimburse participants for expenses incurred in the event of delays, modifications, or difficulties related to obtaining European authorization.
The results of this first auction will reveal which technologies offer the most competitive firm capacity . It will also show whether long-life batteries can gain ground against dispatchable power plants and projects designed to operate using hydrogen.