'We got there' | Norway gets approval for landmark floating offshore wind tender
Norway's supply chain has towering ambitions, but industry headwinds and delays at home have led to frustration
Norway has won approval for the state-funded scheme it intends to use to support development of up to three floating offshore wind projects under the Utsira Nord competitive tender, just one week after submitting a long-delayed application to a European body that regulates such subsidies.
Utsira Nord has 1.5GW of floating offshore wind capacity that has been divided into three separate wind farm areas off Rogaland County on the Norwegian continental shelf.
The average water depth of the three areas is 265 metres, significantly more than other floating offshore wind projects in Europe, bar Norway’s own Hywind Tampen project, where national oil company Equinor is the developer.
In its statement confirming that the state-aid scheme has been approved, ESA said the project would “increase renewable energy production in Norway, support electrification, and cut fossil fuel dependency”.
The aid will be administered in the form of a direct grant by the Norwegian Ministry of Energy and has a total budget of NKr35bn ($3.3bn).
Eagerly awaited
The Utsira Nord tender has been eagerly awaited by a clutch of potential developers, and also a Norwegian supply chain keen for domestic opportunities to support its ambitions of becoming a leading supplier to the global offshore wind sector.
Once final applications were submitted, the ESA approval came more quickly than some industry figures had expected, and the Utsira Nord tender now looks on track to take place in 2025.
"The ESA-Ministry process took the better part of two years and strained industry patience. But that is now behind us and I think all eyes will now be on the site award process to be kicked off shortly,” said Ivar Slengesol, chair of industry association Norwegian Offshore Wind.
The award of project areas in Utsira Nord will now follow a two-stage process.
The aid will be granted to the bidder willing to realise the project with the lowest amount of state aid per megawatt, ESA stated.
In the first step, the energy ministry will announce a qualitative competition for the award of project areas.
In the second stage, the ministry will conduct a state aid auction set to take place in 2028-2029. Norwegian authorities state that they expect the project to be fully operational around 2032-2035.
There was a similar process in December 2023, when state aid for the 1.5GW Sorlige Nordsjo II fixed bottom offshore wind project was approved after two weeks of deliberation.
The competitive auction process for this area, located in Norway’s southern North Sea, was concluded last year. It was won by Ventyr, a consortium consisting of JERA Nex’s Parkwind unit and Ingka Investments, the investment arm of Sweden’s Ingka Group.
Floating wind strength, but lost momentum,
Norwegian oil major Equinor was a pioneer in the sector, using the spar substructure concept for developing the Hywind Scotland and Hywind Tampen projects, but some of this momentum has been lost.
Slengesol cited research by the Multiconsult engineering and consultancy firm showing that Norwegian suppliers to the offshore wind sector get 80% of their revenue from overseas projects and just 20% from their own market.
This is an exact reverse of the oil and gas sector, where Norwegian suppliers get 80% of their revenue from the domestic market, and 20% from overseas.
“I'm positive that we're getting the momentum back now,” Slingesol added. “A domestic market is, of course, important, to scale up industry and over the next few years, we'll have more scale, more projects, more learnings, and standardisation.
“I'm positive about future rounds too. It's taken a long time and we, in the industry, had grown impatient. But we're here now, and hopefully we'll have good competition for the three sites at Utsira Nord," he added.
In the most recent example of how Norwegian suppliers are vying to support the scaling up of floating wind energy industry contractor Aker Solutions announced three new floating wind foundation designs, the YFloat, CONFloat-Omega and CONFloat 7C, using a range of material and design configurations.
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