Norwegian government warned to preserve floating offshore wind leadership legacy
Norwegian companies see floating wind as an opportunity to export technology as much as a power play
Offshore wind developers and contractors are urging Norway to stick to its guns on promised levels of support and timelines in order to take up its promised place as a future leader in floating offshore wind.
Norway’s trailblazing plans have been set back by wrangling over government support that would be provided to the projects.
A debut round for 1.5GW of floating capacity on the Utsira Nord areas has slipped back from its original 2023 launch date due to lengthy attempts to clear its support process through ESA – the body that supervises Norway’s membership of the European Economic Area.
The latest postponement, in March, pushed Utsira Nord back to 2025, when a second round was originally planned.
“Perhaps some of us have been a little bit too optimistic when it comes to the timeline, particularly for floating offshore wind, in terms of expectations for 2030 price levels, but the opportunity is still there,” he stated.
Vassbotn provided a list of reasons why the country can still be a leader in floating wind.
“Norway has been a front runner in floating wind, with demonstration projects and pre-commercial projects. In Enova it has a government body that has opened a path for demonstrating new technology and taking the steps that can mature the supply chain. This is a country that has government targets, the supply chain, access to funding and a need for electrons to decarbonise society and to provide new jobs in the green sector,” he said.
On the danger of new delays, Vassbotn added: “Yes, there will always be these dangers. But we see it through our discussions with the energy ministry that they are better informed now. They understand they have a good view of what this is going to cost and they have a plan for getting it through ESA and the EU system and also the Norwegian parliament to provide all the necessary means required,” he said.
"We see projects being awarded in France and the UK and there is clearly no time to wait, but we can still get there,” he said.
"Disappointing" decision
The Norwegian government arguably did little to repay such confidence two weeks ago when Minister of Energy, Terje Aasland revealed that government support for financing would be restricted to just one area, rather than two as had been signalled previously.
The two areas in question are Vestavind F — which encompasses the Utsira Nord area rand Vestavind B.
Per Lund, CEO of Odfjell Oceanwind, the offshore wind technology arm of Odfjell Drilling, agreed, describing the decision as a setback for the country’s plans to attract investment.
In a circulated article, Lund said the Green Volt consortium’s UK contract for difference award at a strike price of £139.93/MWh (2012 prices) from a £270m ($353m) CfD budget for emerging technologies showed the high level and kind of support still needed for floating wind.
“(This) shows that larger projects have not resulted in significantly lower costs as many have claimed. This is because floating offshore wind is still immature. The world has not yet seen the turbine sizes that will be used on Green Volt and Utsira Nord,” he argued.
“Immaturity entails risk for everyone involved, be it the developer, suppliers, sources of capital or insurance companies. This, in turn, means increased costs. Unfortunately, larger projects mean even greater risk. More projects are needed to drive costs down, and this journey is made most cost-effective by practicing first on smaller projects before we scale.”
Technology exporter
In Lund’s view the Norwegian decision “casts doubt on whether there will be funding for new projects in Norway in the long term” and he argued that it struck a blow to the Norwegian government's own export initiative which had placed much emphasis on offshore wind.
“Floating offshore wind in Norway is as much about global technology exports as it is about national power supply. The knowledge and experience of Norwegian companies is attractive, and creating a domestic market and showcase for Norwegian players was also the starting point for developing Utsira Nord. This seems to have been forgotten along the way,” Lund wrote.
The Norwegian government moved to offer reassurance on such fears with a new statement issued today (Monday) describing the country's offshore wind initiative as "continuing on a steady course" and stating the two areas that will effectively compete for up to Nkr35bn of support. Under the previous model, two areas out of three could obtain support.
"The government will announce the next project areas for development of offshore wind on the Norwegian continental shelf in 2025 and is proposing NKr35bn for a support scheme dedicated towards the first floating offshore wind tender within the Vestavind F and Vestavind B areas," it stated.
Energy minister Terje Aasland said floating wind technology remains "immature and costly", so state support is required to accelerate its development. He referred again to Norway's "enormous potential for floating offshore wind on its continental shelf."
Norway's broader plan for the sector includes allocating project areas for 30GW offshore wind by 2040, of which about 70% is expected to be floating.
The government said it aims to conduct the next tendering round for offshore wind in 2025 and then hold regularly scheduled tendering rounds and state aid competitions leading up to 2040.
Stiff competition
Deep Winds' Vassbotn said he still expects stiff competition on Utsira Nord, adding that he expects to combine his company's local project development and stakeholder knowledge with EDF Renewables' experience of a floating wind project in France.
EDF Renewables developed the 24MWProvence Grand Large (PGL) array using three 8.4MW Siemens Gamesa turbines on floating structures moored by a tension leg system.
EDF and Deep Wind have been working together on a potential Utsira Nord bid for more than three years and have selected Archer's semi-submersible Ocergy design as their preferred solution for Utsira Nord in the Norwegian North Sea.
"We think we are in a strong position, combining our local advantage with the global expertise of our partner EDF. It's going to be a touchy competition of course, but we are happy where we are," Vassbotn said
"We've done a lot of work already, and we continue to do important work to educate society and to ensure that we continue to have the support of the local municipalities. That's a key activity... and then we will need to see what is coming in the updated bid requirements later on in the year."
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