Norway Gets Strong Interest in Offshore Wind with Seven Groups Applying
Despite the emerging global concerns on the financial aspects of the development of the offshore wind energy industry, the Norwegian government reported today that it received strong interest in the first phase of the country’s first tender. In addition to expected proposals from the major companies in Europe, including from the Norwegian energy sector, a Chinese manufacturer is also seeking to prequalify for the bidding.
The Norwegian Ministry of Petroleum and Energy received seven applications to participate in the auction for the first project area for offshore wind known as Sørlige North Sea II. Norway announced its first two target areas in 2020 as part of a goal to reach 30 GW of offshore wind energy by 2040. The country has been working to define its industry and the process and in June agreed to provide an initial $2.13 billion for the support of the first project.
“Despite large cost increases for the global offshore wind industry recently, there are several strong players applying to be able to participate in the auction round for Sørlige North Sea II,” announced Oil and Energy Minister Terje Aasland. “It is important for the government's offshore wind investment. We are now starting to assess the various applications.”
The deadline to file to pre-register was today, November 15. In the application, companies had to document that they meet the minimum criteria for sustainability and would contribute to broader positive effects. The companies also had to document the ability to complete the project.
Norway is targeting two areas for its first offshore wind farm development (Norwegian Petroleum Directorate)
A total of seven applications were received, including partnerships between Equinor and RWE, Aker Offshore Wind, BP, and Statkraft, and Shell, Lyse, and Eviny. Others include the Hydroelectric Corporation, Belgium’s Parkwind in partnership with Ingka, and Norseman Wind, a company set up by Germany’s EnBW. China’s Mingyang Smart Energy, one of the large manufacturers of wind turbines, was a surprise entrant into the process.
The ministry said it will review the applications and expects to prequalify a minimum of six and a maximum of eight applicants. However, if fewer than six applicants can be prequalified, the ministry will assess whether the auction should be carried out. The tentative auction date is February 2024.
They said it was a positive step that several strong players are showing interest in the development of offshore wind on the Norwegian continental shelf. However, others including Ørsted, Vattenfall, and Eni, each of which is active elsewhere in the industry, declined to participate in the project. Earlier in the week, it was reported that Ørsted was withdrawing from a partnership in Norway as it reassesses its wind portfolio in the wake of major charges to abandon projects in the United States. Vattenfall has also reported financial challenges due to problems in the supply chain and cost increases in part due to inflation.
Sørlige Nordsjø II would be located south of Norway in the North Sea approximately 85 miles offshore. The water depth at the site is between approximately 175 feet and 230 feet with the anticipation that it will be the basis for a 1.5 GW fixed-bottom wind farm.
The Norwegian Petroleum Directorate announced earlier this week that it has collected and prepared the first data sets for offshore wind on the Norwegian shelf. They conducted underwater surveys between 2022 and 2023 for Sørlige Nordsjø II and that data is now available for download.
A survey on the second site, Utsira Nord, located to the west of Norway is currently underway and will be completed in the spring of 2024. That is expected to be a more challenging location that will require floating wind turbines.