TotalEnergies fights Berlin for €800 million wind refund

Three years ago, TotalEnergies and BP bid €12.6 billion for offshore wind sites in the German North Sea and Baltic without asking for a cent in subsidies. Politicians celebrated. Proof, at last, that renewable energy could stand on its own. By May 2026, both companies want their money back. The model that was supposed to make state support obsolete has collapsed across four countries.

TotalEnergies has paid roughly €800 million in deposits and guarantees and wants Berlin to hand the sites back. BP, through its joint venture Jera Nex BP, is making a similar push. Both argue the projects are no longer financially viable. Berlin has refused: the government says existing law forbids returning awarded concessions, and the first penalty deadline arrives in autumn 2027.

How the math broke

Between 2019 and 2023, governments across northern Europe convinced themselves that offshore wind no longer needed state support. The Netherlands awarded its Hollandse Kust Zuid project at zero subsidy. Germany went further with "negative bidding," where companies paid governments for the right to build. The €12.6 billion haul was the peak of that confidence. It lasted about three years.

The ECB (the European Central Bank, which sets interest rates for the eurozone) raised its key rate from 0% to 4% between July 2022 and September 2023. Offshore wind is one of the most capital-heavy forms of energy. The bulk of costs hit upfront for turbines, foundations, and undersea cables, while revenue trickles in over 25 years. When borrowing was cheap, these projects returned a slim profit. With financing costs several points higher, many lose money for their entire lifetime. Construction and component costs rose 30-50% from 2021 levels, and the cost of financing European projects climbed 3-4 percentage points (KPMG/OFATE). A project designed on 2021 assumptions could see its profit margin vanish entirely.

The grid couldn't keep up either. In Germany, lead times for offshore transmission components now stretch to six years. In the Netherlands, 60% of TenneT's expansion projects run an average 2.5 years behind schedule. A wind farm without a grid connection is a stranded asset, costing money to maintain while earning nothing. The energy majors, meanwhile, are redirecting capital toward faster-returning oil and gas, making these wind commitments look even worse on their balance sheets.

Who pays for the retreat

Germany's electricity consumers lose first. The government had earmarked 90% of the auction revenues to cap grid fees and power prices, keeping bills lower for households still feeling the 2022 energy crisis. If TotalEnergies' refund demand succeeds, over €7 billion disappears from that pot.

The longer cost is delay. Citing their own commissioned Fraunhofer study, the companies want to push Germany's 70 GW offshore target back 16 years, from 2041 to 2057. The same pattern shows up elsewhere. The Netherlands will miss its 21 GW target for 2031. Denmark's December 2024 auction received zero qualifying bids. Britain's Allocation Round 5 in 2023 drew no offshore wind bids at all.

Every government now converges on the same fix: Contracts for Difference (CfDs), where the state guarantees a minimum electricity price over 20 years. If the market price falls below that floor, the government covers the gap. Germany is redesigning its auctions around CfDs for 2027. Denmark secured €5 billion in EU-approved state aid for a new CfD scheme. Britain raised its guaranteed price after the 2023 failure and saw 8.4 GW awarded in Allocation Round 7.

The industry's own lobby group has declared negative bidding "dead". State support is back, after a three-year experiment in doing without it. The question that "subsidy-free" was supposed to settle remains wide open: how much public money should flow to private energy companies, on what terms, and whether the decade lost chasing a cheaper answer can be made up.