Leasing drives increasing cost

The cost of producing wind power is steadily increasing, as the lease for land on which the wind turbines stand continues to rise.

According to a report in the newspaper “Die Welt”, the leasing costs for plots of ground intended for the building of wind parks have partially seen a steep increase in Germany. This contradicts the goal of using wind power as an inexpensive source of “green” electricity needed for the hydrogen industry and its electrolysis plants. Both industry and consumers are looking to renewable energies to lower the cost of electricity, as politicians have promised. But aside from leasing, there are other factors which drive the costs for wind power: At the beginning of this year, the Federal Network Agency (Bundesnetzagentur) has raised the cap of its subsidies for wind power by 25 percent to 7.35 cent per kilowatt-hour. Raw materials and the energy needed to construct wind turbines are also becoming more expensive, and the interest rates on loans are rising as well. Wind power is therefore growing more expensive, not cheaper.

From the perspective of the German Wind Energy Association (Bundesverband Windenergie, BWE), the “strong competition surrounding the use of land creates a one-sided advantage for landowners and forest owners”. In order to decrease the costs for expanding the use of wind power, in 2022 the BWE had suggested to limit the leasing costs for wind power systems to 45 times the average of the leasing costs for agricultural land. Further, landowners are to receive some of the income generated from selling electricity. This suggestion however was met with criticism from farmers arguing that the existence of many farms depends on the income from leasing to wind and solar power.

Another factor that drives the leasing costs for land used for wind power, is the role of government institutions. These offer such land in small plots, thus generating higher income. At the same time this however increases the cost for wind power generated electricity – and undermines the goals of protecting the climate.