Minister of Petroleum and Energy, Tina Bru, held this speech at the conference Floating Wind 2021 in Haugesund on June 8th 2021.
First of all, let me just say – it has never before been so great to be in Haugesund, seeing all of you here today!
I can count the number of trips I have been on as minister on one hand – and this is my second (!) time in Haugesund.
One year ago, I had the pleasure of visiting Haugesund – in person, for my first trip after last years lock down. This is my first trip after this years lock down.. So in a way, this has turned into a tradition. But I really hope its one that ends now.
Last year, in the same bright sunshine that we have today, alongside Zefyros, we officially opened the areas "Utsira Nord" and "Sørlige Nordsjø II" for offshore wind.
We also visited Aibel and Østensjø Rederi. Both companies, located here in Haugesund, are great examples of our international competitiveness on offshore wind.
Much has happened since my last visit, and I am very glad to say that we are, and have been, moving forward on offshore wind here in Norway – despite the pandemic.
As part of the corona stimulus package, funding was granted for two offshore wind initiatives last summer;
- a research centre for offshore wind, and
- an industry project for delivery models for the supply chain for offshore wind.
The North Wind research centre is now up and running and aims to contribute to cutting costs and increasing the efficiency within offshore wind. At the same time, it will focus on sustainability in the offshore wind industry.
North Wind is hosted by Sintef Energy, and gathers more than fifty partners from research and industry worldwide and will mainly focus on floating offshore wind.
The Federation of Norwegian Industries is in the final stages of their project "Norwegian delivery models for offshore wind". Their results and recommendations will be presented in a webinar on June 15th. I look forward to the presentation with high expectations.
Last October, Prime Minister Erna Solberg had the pleasure of marking the start of the construction of Hywind Tampen, in the shipyard at Stord.
And just recently, I was happy to announce that the Ministry will make an exception from the area regulation to allow MET-Centre, outside Karmøy, to apply for a cable expansion so they can include the Flagship project in their portfolio.
As the companies from Haugalandet engaged in offshore wind know - maybe better than anyone – offshore wind is an international and highly competitive business. Cooperation and knowledge sharing are key to get offshore wind going. But going it is – faster and faster globally.
The European Commission has set ambitious targets in their Offshore Energy Strategy.
We cooperate closely with the EU-Commission and the relevant member states through the North Sea Energy Cooperation.
NSEC has an objective to facilitate the accelerated cost-effective deployment of offshore wind and further energy interconnection between North Seas countries through voluntary cooperation.
During the past year, we have strengthened our involvement in the North Sea Energy Cooperation. We have done so because we believe international cooperation is key to finding the best solutions to these complex issues.
We will continue to actively engage in the NSEC High Level group, as well as the support groups on hybrid and joint projects, maritime spatial planning and support framework and finance.
This year I have also experienced Europe's eagerness for offshore wind firsthand, as I have had meetings with ministers from several different countries all wanting to discuss this topic. There is no doubt that the development of offshore wind is high on the agenda for many countries and politicians.
With all these milestones behind us, I can't think of a better time and place, than here in Haugesund, to announce some exiting news on our policies for offshore wind.
The green shift is no longer an abstract term – it's taking place right now before our eyes – and offshore wind is an important driving force.
Never have green investments globally been higher. According to Bloomberg New Energy Finance, who will be speaking after me, the committed investments in 2020 were a staggering five hundred billion dollars. Good news, also taking the new IEA-report in consideration.
The pace of development on offshore wind, in Norway and globally, is truly accelerating. In China, South East Asia, and the US – and not least at our own doorstep.
One of Norway's closest and most important partners, the EU, is aiming for a 25-fold increase of production capacity from offshore wind the next 30 years.
Norwegian companies are both eager and well positioned to enter these promising markets. And, some companies already have strong positions in the global market.
Last year, Norwegian companies had an international turnover of more than 11 billion kroner, in goods and services related to offshore wind.
Turning our attention to the development in Norway.
The starting point for shaping our policy is that offshore wind is an industrial opportunity for Norway. We need to diversify our industrial base and we need to create new jobs.
We want to build on the technology and competence in our oil and gas companies, and our fantastic service and supply industry. So, let me dive into the Norwegian government's policies for offshore wind.
Last year we opened two areas for offshore wind. But we have listened to the industry, and we know making more acreage available is important.
Therefore, the government will initiate a process of identifying new areas for offshore wind production and conduct an impact assessment of these areas. This will facilitate future activity and provide predictability for the industry.
NVE will lead this process and work closely with relevant agencies. The process is expected to take approximately two years.
At the same time, to ensure a neutral and efficient coordination of the offshore grid users and provide clarity for the developers of offshore wind, there is a need for an offshore system operator.
Many other European countries are working on or have already themselves identified how this will be regulated. We need to do the same.
So, the government will start working on regulation for the offshore system operation and will designate Statnett as the system operator under the Offshore Energy Act for cables and installations not regulated under the Petroleum Act.
We will also assess and possibly propose necessary legislative changes and more detailed rules for efficient access to, and use, of the offshore grid.
We need to facilitate a more interconnected offshore grid, with the possibility of new connections and future expansions of the grid.
Like I said, creating opportunity for Norwegian industry is important. However, bottom fixed and floating wind requires different approaches. First, let's talk about Sørlige Nordsjø II.
The opening of Sørlige Nordsjø II represents an opportunity to develop profitable bottom-fixed wind projects in Norwegian waters.
The industry has shown great interest in the area, and it is expected that projects in the Sørlige Nordsjø II can be developed on a commercial basis – with no state aid.
As scale is important, the government will award 2 or 3 project areas in Sørlige Nordsjø II for development. The award will be based on a two-stage process. The first step is a qualification-process. The second step will be an auction where the qualified companies/consortias can participate.
However, there are some elements we have to put in place before we can start this process. We will have to assess legal and other effects of hybrid projects. And we will have to set the detailed terms for the auction.
Many developers are looking into hybrid projects, combining offshore wind farms and interconnectors. Hybrid projects will have effects on our power system, on the electricity flows and prices, and on power exchange on existing interconnectors.
Similar to more traditional interconnectors like NordLink which recently opened, and North Sea Link expected to come online later this year.
Development and regulation of hybrid projects is being discussed in the EU and in the North Sea Energy Cooperation. This is new ground for many countries looking to develop offshore wind.
The government will do an assessment on various effects and legal aspects of hybrid projects, where the aim is to clarify these effects and aspects in advance of an award of areas in Sørlige Nordsjø II.
We aim to announce the auction for Sørlige Nordsjø II in Q1 2022.
As you know, this government has supported the development of floating offshore wind technology. This is where we believe we have the biggest opportunity in developing new industry, creating new jobs and taking a big share of an expanding global market.
From the Hywind Demo turbine in 2009, to granting Hywind Tampen two point three billion Norwegian crowns in 2019, and the opening of Utsira North last summer – we have steadily built the foundation for the next step in the development of floating wind on the Norwegian Continental Shelf.
Because the challenges are different, the process for granting licenses will be different at Utsira Nord. Considering the current cost of floating wind, any large scale project at Utsira Nord will require state aid to be commercially viable. With this in mind, we do not think auctions are the right approach for this area.
We remain committed to Enova as the main source for supporting technological and industrial development of floating offshore wind.
With technology maturing rapidly, and costs coming down, it is difficult to predict what level of support a project of two- to five hundred mega watts will need.
We believe the best way forward is to develop projects through the licensing process. When projects have matured sufficiently, we will assess the timing and level of support for floating wind projects. The assessment will be based on updated information from NVE, Enova and other relevant actors.
If the assessments show that a grant will contribute sufficiently to technology development of floating offshore wind, that the projects are sufficiently mature and that the project is expected to be profitable for the society, the government will consider increasing the support to Enova in the state budget process.
To mature the projects, we must first award areas. We are proposing to award at least three areas for up to five hundred megawatts each, at Utsira North.
The award of acreage will be based on qualitative criterias and take place as soon as we have the framework in place. We are aiming for the process to start by the end of this year.
Furthermore, the government will establish an offshore wind collaboration forum to enhance collaboration and reduce potential conflicts. The forum will bring together industry leaders, public authorities, the research community, industrial clusters, users of the ocean space and additional relevant stakeholders.
Offshore wind offers great opportunities for value creation and jobs in the industry all over Norway. But we know that building new industry can be controversial.
The aim of this forum is to build competence, find sustainable solutions and thus strengthen the industry's competitiveness – where collaboration is key.
The forum will address important issues like co-existence, supply chain development and export opportunities, just to mention a few.
It will be lead by me, and I will invite the stakeholders to a first meeting in early September.
As we see clearly here today, the offshore wind is a global industry. And we will continue to take an active part in the global cooperation and to monitor the development on offshore wind internationally.
The development of offshore wind in Norway is now entering a new era. We are now laying down the ground work to facilitate large scale development of offshore wind in Norwegian waters.
This will contribute to the energy transition we need, and at the same time create jobs, activity, and new innovations.
I am looking forward to a fruitful public consultation of our guidelines and Offshore Energy Regulation that will be published with our White paper June 11th, and I hope you are too.
Thank you to everyone for listening, it was my pleasure to be here today!