Wind

Drop-outs, elections: is Norway's offshore wind dream sinking into the sea?

Pull-out of renewables giant Statkraft and Corio Generation put spotlight on remaining heavyweights such as Equinor or EnBW, while elections could also disrupt country's offshore wind policy

Arvid Nesse of Norwegian Offshore Wind.
Arvid Nesse of Norwegian Offshore Wind.Photo: Arne Vatnøy/Norwegian Offshore Wind
European Editor, Recharge
Norway’s offshore wind dreams suffered a heavy setback last week when Statkraft, Europe’s largest renewable energy operator, pulled out of the upcoming tender for the Utsira Nord (North) floating wind area.
Just a day later, Norwegian power company A Energi said its partner for a joint bid in the Utsira tender, Corio Generation, owned by investment giant Macquarie, had also pulled out. A series of companies had dropped out of the race for Utsira Nord earlier, among them Shell, the Engie-EDPR tie-up Ocean Winds, and Aker unit Mainstream Renewable Power.

That leads to the question whether offshore wind – which, due to the deep waters on much of Norway's continental shelf, means mostly expensive floating wind – does have a future in the country at all.

Recent flops in the 3GW Danish offshore wind tender and industry heavyweight Orsted halting its Hornsea 4 project in the UK, don’t bode well for tenders in relatively immature markets such as Norway.

Norway's outgoing government aims to get 30GW of offshore wind capacity in the water by 2040, up from a mere 101MW currently. Norway earlier this decade was still seen as one of the most promising future markets for wind at sea. But torturous delays to its first offshore wind tenders, coupled with factors affecting the industry in general and floating wind in particular (cost inflation, supply chain bottlenecks, rising financing costs), cooled down investor interest.

The Norwegian wind industry last year was also disappointed that only one 500MW site within the Utsira Nord area would initially gain government support – instead of two or three 500MW sites as had been expected earlier.

Industry experts nevertheless see a chance for the Utsira Nord tender to succeed, but also point to challenges.

"Norway isn't retreating from offshore wind, but the revised two-stage tender model demands substantial commitment from developers for a one-in-three chance of securing support,” Sasha Bond-Smith, research analyst at Wood Mackenzie, told Recharge.

“This shifts the risk burden onto developers during a period of heightened risk aversion. However, significantly reduced expectations for offshore wind across Europe elevate offshore wind capture prices in Norway, thereby strengthening the business case."

Equinor and EnBW still in race?

Arvid Nesse, CEO of industry lobby group Norwegian Offshore Wind, hopes that the upcoming floating wind auction will have a good result and points to an open competition with several groups still in the running.

Six companies or bidding consortia could still be in the race to be allocated one of the three project areas at Utsira Nord in a qualitative first auction and, at a later ‘maturation’ stage, win up to NKr35bn ($3.45bn) in state aid.

  • Norwegian oil & gas giant Equinor and local energy outfit Vargronn
  • French nuclear giant EDF and local company Deep Wind Offshore
  • Ingka Investment, the investment arm of Ikea owner Ingka Group, Japan’s Kansai, Norway’s Odfjell Oceanwind and Source Gallileo
  • Norway’s RES and Zephyr
  • Germany’s EnBW
  • A Energi (without Corio) if it finds a new partner, or joins another bid

Most companies are very tight-lipped when it comes to confirming their participation in upcoming tenders, so it is difficult to assess which of these potential bidders will really take part.

The initial list of potential bidders had featured a large share of oil & gas majors in joint ventures with other local entities and pure-play offshore wind developers, Alexander Flotre, head of offshore wind research at Rystad Energy, pointed out.

“As we know, many of these E&P companies have started reverting to their core business, being oil and gas, and moved away from offshore wind – especially the floating segment,” he told Recharge.

“Orsted has made a similar move, by focusing on bottom-fixed offshore wind, and value over volume.”

But while Equinor has lowered its renewable energy ambitions (the company, for example, earlier halted its giant Trollvind floating wind project), the state-owned giant shouldn’t be ruled out for participation in the Utsira tender, Flotre thinks.
The company has shown several signs of staying committed to offshore wind: by weathering the storm surrounding their Empire Wind project offshore New York; by reaching a final investment decision for its Bałtyk 2 & 3 projects in Poland in May; and by participating in the UK’s Celtic Sea auction, where it was awarded a development area last week.

“The latter is important – firstly because it is a testament to Equinor’s commitment to continue to develop new offshore wind projects, and secondly because it shows that they still have ambitions in the floating offshore wind space,” Flotre reckons.

“Norway being their home market and [previously] having pushed for the development of their Trollvind floating wind project, should also point in favour of Equinor participating in the auction.”

Equinor said it continues to work with Vargronn on a possible joint bid in the Utsira Nord tender, but at this point, neither confirms nor denies that it will actually take part.

"The prerequisite to go further is that we find a solution to make the project feasible, and that it can be developed safely and profitably," an Equinor spokesman told Recharge last week.

Vargronn CEO Stephen Bull was more forthcoming.

"At the moment, we have the 15th of September as the application deadline (for Utsira Nord). The main thing to say is that we are positive that things are still moving for floating offshore wind in Norway,” he told Recharge at the sidelines of the Global Offshore Wind Conference in London.

“Norway has a supply issue. It's actually a demand crunch that's coming up there. If you continue with the electrification of industry, transport, and oil and gas, Norway will not have enough power.

“And the supply chain is potentially phenomenal, with some of the world's best offshore (oil and gas) companies. It would be a crime not to use that for renewables.”

Of the other potential contenders for Utsira Nord, the consortium led by Ingka Investments has for it that the Ikea owner (in a different consortium) last year already won the tender for the 1.5GW Southern North Sea 2 zone in Norway – although it is unclear how big synergies here could be as that area is bottom-fixed.

EnBW, another heavyweight in offshore wind, has sent out mixed messages.

The German utility with vast experience in offshore wind didn’t bid for Southern North Sea 2, citing "inadequate conditions", despite having been pre-qualified for it. Holger Grubel, EnBW’s head of portfolio development in offshore wind, told Recharge the project would not have been financially viable according to internal calculations.
But EnBW in January gave a boost to Norway's embattled offshore wind sector when it hired a new boss for its unit there and insisted it is committed to the market for the long term.

The EDF and Deep Wind Offshore consortium could also be a strong contender. But EDF just won a 1.5GW sea lease area in the Celtic Sea, and the company, which in recent years was fully nationalised by France due to its enormous debt burden linked to nuclear commitments, may look very closely at where to spend large amounts of capex.

For several of the bidders, it could help that the Utsira Nord auction will be held in two stages – the first stage for the lease areas and the second stage for the state aid, Rystad’s Flotre pointed out.

“This means that developers can view the first stage as an option that they can later exercise if state aid and project- and market fundamentals allow them to move forward,” he said.

“Since the first stage is strictly qualitative, it is a fairly cheap option to compete for if you are a serious and committed bidder.”

Disruption after elections?

While the September 15 date for the first phase of the Utsira Nord tender will show whether there is still enough appetite among developers in the still immature Norwegian market at the moment, another event a week earlier may determine the industry’s longer-term prospects.

Voters on September 8 will decide whether the current government under Labour Prime Minister Jonas Gahr Støre get a second lease of life.

The government had collapsed in January after the ruling coalition split over the proposed adoption of EU renewables and energy efficiency directives, showing that energy issues can be deeply divisive in the country.

“The future development [of offshore wind] will depend on the elections. Labour in the government has been clear that they want to have 30GW by 2040,” Norwegian Offshore Wind’s Nesse said.

But the right-wing populist Progress Party (Fremskittspartiet), which currently seems the main contender to Labour in opinion polls, is against more offshore wind at this point. The Conservative Party (Hoyre), third in the polls, is against high state subsidies for offshore wind.

As no party is expected to win an outright majority, much will depend on negotiations to form a coalition government with one of the smaller parties to the right and left of the political spectrum.

(Copyright)

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Published 24 June 2025, 04:46Updated 24 June 2025, 04:51
EuropeNorwayPolicyNorwegian Offshore WindStatkraft