Norway announced on Monday a tender for three project areas for floating offshore wind in a highly-anticipated first competition for this type of renewable energy in the Nordic country.
The Norwegian Energy Ministry, which said earlier this year that it would bet on floating wind instead of fixed-bottom offshore wind, is now opening competition for project areas for offshore wind in Utsira Nord outside the coast of Rogaland off Norway’s southwest coast.
The installed capacity in each project area cannot exceed 500 megawatts (MW), according to the competition tender, in which applications for projects will be received until September 15, 2025.
Norway will subsidize the projects, for a total of $3.4 billion (35 billion Norwegian crowns) cap for state aid at Utsira Nord.
Winning bids will have two years to mature their projects and participate in an auction for state aid as a direct grant in 2028 or 2029.
The model for allocating project areas and government support – developed in dialogue with the offshore industry – is adapted to floating offshore wind and will contribute to both technology development and cost reductions for subsequent projects, Energy Minister Terje Aasland said in a statement.
Earlier this year, Norway scrapped plans to hold a fixed-bottom offshore wind tender at the Sørvest F offshore area in 2025, due to high costs to connect power to the grid.
Instead of fixed-bottom offshore wind at Sørvest F, the Norwegian government will prioritize floating wind in the tenders with radial links to the grid, the energy ministry said in February.
Norway’s floating wind tender comes as the global offshore wind industry continues to face significant headwinds relating to supply chain, regulatory, and macroeconomic developments.
Orsted, the world’s biggest offshore wind project developer, earlier this month warned of a continued challenging environment for the industry.
Due to higher costs and interest rates, the company announced it had decided to discontinue the development of the Hornsea 4 offshore wind project in the UK in its current form.
By Michael Kern for Oilprice.com
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