Germany’s biomethane auction for electricity generation: higher support, too few projects—and an uncertain future
Germany’s latest biomethane auction secured 6.033 MW across three successful bids—just 28.9% of the reduced auction volume and 2.0% of the original 300 MW allocation. The results, announced by the Bundesnetzagentur on 29 September, show that a higher support ceiling has not yet rebuilt a substantial project pipeline.[1]
The proposed abolition of dedicated biomethane auctions under the government’s EEG 2027 bill introduces uncertainty over future support arrangements, potentially weakening investor confidence in new biomethane-fired power projects.[2]
Source: Bundesnetzagentur, results announced 29 September 2026 [1]. Award volumes, not commissioned capacity.
It purchases electricity-generation capacity—not biomethane production
The dedicated auction, introduced in 2021 under Germany’s Renewable Energy Sources Act, or EEG, supports electricity generated using biomethane. Auction volumes are expressed in electrical capacity, and bid prices refer to electricity—not the energy content of the gas purchased.[3]
Support for electricity generated using biomethane, auctioned as electrical capacity and priced per unit of electricity.
How projects enter and win
The auction route applies to eligible new plants above 150 kW. Plants must first enter operation after receiving an award, and the required permits and registration must generally be in place four weeks before the bidding deadline. These requirements favour more advanced projects over early-stage proposals.[4]
Developers bid an electrical capacity and a support reference price. Eligible bids are ranked from lowest to highest price, and awards are made on a pay-as-bid basis: successful projects receive their own bid value rather than a single clearing price shared by all winners.[5]
The support period is generally 20 years. Under the current biomethane provisions, an award normally expires if the plant has not entered operation within 42 months of the public announcement. An auction award therefore establishes a conditional support entitlement.[6]
The winning price is not an additional payment on top of all electricity revenue
The bid establishes the anzulegender Wert: the reference value used to calculate the EEG market premium. For these new projects, the simplified calculation is:
The plant sells its electricity and receives the applicable premium. It can improve its revenue by generating when its realised selling price exceeds the benchmark.
Illustrative. Reference value set to {{ refNote }}. Benchmark and realised-price levels are hypothetical; flexibility and heat revenues are excluded.
Eligible plants also receive a separate flexibility payment of €100 per kW of installed capacity per year, subject to performance and other conditions. Heat sales can provide another revenue stream where the project has a viable heat customer. The investment case therefore depends on several components, not the auction price alone.[7]
The central design feature: very limited supported electricity output
The annual supported electricity quantity is limited to the equivalent of 10% of installed capacity operating throughout the year—or 876 full-load hours in a non-leap year. A 1 MW plant therefore has an annual supported-output allowance equivalent to 876 MWh.[8]
A plant can operate longer at partial load, or generate additional electricity without the same EEG support. Nevertheless, the commercial incentive is to concentrate supported production into high-value periods rather than operate as a conventional baseload generator.[8] The investment challenge is equally clear: recover the costs of a year-round asset from a relatively small supported electricity volume.
Support adjustments have yet to translate into sustained auction participation
The auction has not always attracted negligible interest. Its first round came close to allocating the entire available volume. Participation then collapsed, followed by several years without successful awards.
across multiple rounds
In 2023–2025, five rounds received no bids. September 2024 received one 2 MW bid, which was excluded. Figures are award volumes, not commissioned capacity. Share awarded is capacity awarded divided by capacity offered. Source: Bundesnetzagentur [9].
The statutory framework expanded to 600 MW annually from 2023, split between April and September. However, the legislation allows the Bundesnetzagentur to reduce the volume offered when undersubscription is expected. The much smaller volumes actually offered in 2026 therefore should not be mistaken for the original annual policy ambition.[10]
Several corrective measures have already been taken.[11]
In raising the bid ceiling, the Bundesnetzagentur explicitly recognised that the earlier ceiling was insufficient against expected costs. The April 2026 round was the first biomethane auction applying the Biomassepaket changes following European Commission approval in September 2025.[12]
These changes produced a modest reopening of the market—not a sustained recovery. Across both 2026 rounds, awards totalled 44.057 MW, equivalent to 7.3% of the original 600 MW annual allocation.[9]
Trend 1: A few bidders account for most awarded capacity
In October 2022, both awards went to badenova Wärmeplus in Freiburg im Breisgau. In April 2026, SKW Speicherkraftwerk received two awards of 9.999 MW each in Thiendorf, together 52.6% of the round’s awarded capacity. In September 2026, Rasche & Weßler’s award in Alfhausen accounted for 84.4% of the total; the remaining two awards together contributed less than 1 MW.
Across both 2026 rounds, the nine awards involved seven named bidding entities. SKW Speicherkraftwerk and Rasche & Weßler together accounted for 62.2% of awarded capacity, measured by the published bidder names rather than consolidated corporate ownership.
Trend 2: Several states are represented, but capacity remains geographically concentrated
The nine 2026 awards span six federal states. However, Saxony and Lower Saxony together account for 73.7% of awarded capacity: 19.998 MW in Saxony, entirely from SKW’s two Thiendorf awards, and 12.488 MW in Lower Saxony, across Berge and Alfhausen.
Schleswig-Holstein (Gettorf) and North Rhine-Westphalia (Reken) are combined: the 2026 total less the four other states. Shares of 44.057 MW awarded across both 2026 rounds.
Bavaria and Baden-Württemberg appear in September’s winning list, but their combined 0.939 MW represents only 2.1% of the 2026 total. The addition of Augsburg and Untermarchtal therefore broadens the location count much more than the capacity distribution.
The government’s published EEG 2027 bill proposes ending the dedicated biomethane auctions from 2027. This is a prospective legislative change, not the framework under which September’s awards were made.[2]
Ends dedicated auctions from 2027. Its stated rationale combines poor participation with the expectation that biomethane will increasingly be needed in other sectors.[2]
Oppose abolition and call for either continued, redesigned auctions or transitional protection for projects already developed or demonstrably under development. Their position is that poor auction design, rather than a lack of useful applications, explains the weak pipeline.[13]
The bill’s general grandfathering approach would preserve the previous framework for awards associated with bidding dates before 1 January 2027, subject to specified exceptions.[2]