Announces the first competitions for offshore wind
Press release | Date: 29/03/2023 | Office of the Prime Minister, Ministry of Petroleum and Energy
By announcing the first competitions for offshore wind areas, the Norwegian government takes a big step towards its ambition of allocating areas for 30,000 MW offshore wind by 2040.
– Leading Norway through the green shift is one of our major tasks as a government. In order to further develop Norway, the answer to almost all questions is that we need more energy production. And that is why today marks a milestone, says Prime Minister Jonas Gahr Støre.
– The government's ambition is to allocate areas for 30,000 MW offshore wind by 2040, which is almost on par with Norway's total power production last year. Today is the starting signal, and it is important to keep up the pace, says Støre.
The Ministry of Petroleum and Energy is announcing a competition for project areas for renewable energy production at sea in two areas on the Norwegian continental shelf: Sørlige Nordsjø II and Utsira Nord.
– We are looking forward to receiving many good applications from relevant developers, so that we can allocate the project areas later this year, says Minister of Petroleum and Energy Terje Aasland.
Minister of Petroleum and Energy says that the input from the industry has been very important for the competitions announced today.
– Collaboration is a key to success, and I am very satisfied with all the input we received in the public consultation. It has improved the announcement. Together, we make it possible to develop new industry, increase renewable power production and facilitate innovation and technology development, says Aasland.
The Energy Commission's report, which was presented earlier this year, points out that we need to build more renewable power faster than before, by doing several things at the same time. Therefore, the work to assess new areas for offshore wind has already started. The Government plans a new announcement of offshore wind areas in 2025.
– A prerequisite for us has been to have a dialogue with various interest groups to ensure good coexistence. Norway has good traditions for developing the continental shelf step by step, and we will follow this method also for our offshore wind development, says Aasland.
– Norway has great opportunities in offshore wind. Our areas at sea, are five times larger than areas on land. And there is a lot of wind along our coast. In addition, we have skilled professionals and companies that will contribute to develop this technology, says Støre.
The application deadline for Sørlige Nordsjø II is 4th of August 2023 and for Utsira Nord 1st of September 2023.
Sørlige Nordsjø II
Production of renewable energy at Sørlige Nordsjø II, first phase will be awarded to one applicant through pre-qualification, followed by an auction. The area will be awarded by the end of the year.
A pre-qualification will be carried out for actors who wish to compete for the area in Sørlige Nordsjø II, first phase. The pre-qualification criteria will contribute to the development of offshore wind in Norway in a sustainable way, and to ripple effects for society.
In the pre-qualification, the applicants must document that they have satisfactory technical competence, financial strength and meet relevant requirements for health, environment and safety through the pre-qualification criteria implementation ability, sustainability and positive local ripple effects. Applicants who are prequalified will then have the opportunity to participate in an auction. There is a minimum of six and a maximum of eight applicants who may participate in the auction.
The Ministry of Petroleum and Energy will propose a preposition to Parliament for authorization to enter a two-sided contract for difference for renewable energy production at sea from Sørlige Nordsjø II, first phase. Any state funding will be limited by an upper ceiling.
Sørlige Nordsjø II, first phase will be awarded by action. The auction model is British auction with open bidding.
Production of renewable power at Utsira Nord will be awarded to three actors on the basis of qualitative criteria. Awarding will take place by the end of 2023. The areas of Utsira Nord will be awarded on the basis of qualitative criteria. Among other things, the criteria will facilitate for innovation and technology development in floating offshore wind.
Utsira Nord has been opened for a capacity of 1,500 MW, and there are three projects that will be allocated a project area based on the qualitative criteria. The Ministry refers to NVE's work on identifying new areas and capacity expansion, cf. assignment from the ministry of February 9 2022. If NVEs work concludes that it is possible to expand the capacity, an increase of capacity up to 750 MW will be considered for each project.
After the areas have been allocated, the developers will conduct an impact assessment and mature the areas further, before a competition for state funding is carried out. The government will propose a preposition to Parliament with a proposal for a cost framework and a commitment authorization. In the proposal, the government will propose that one project does not obtain state funding. The government will further propose that the projects that receive support are awarded a support for 500 MW each, but will be given the option to build 750 MW. The project that does not receive state funding will retain the right to the area for a period, and may use the general public support system and will be able to participate in possible future competitions such as state funding for offshore wind.