Norway has confirmed the final roster of five consortia bidding for acreage in its first major offshore wind leasing round.
This auction concerns one of two 1.5GW sites at a lease area known as Sørlige Nordsjø II (Southern North Sea) and seeks projects that can be directly connected to the mainland grid.
In 2022 the government said it would open up vast new areas of licensing for offshore wind – both fixed and floating – with the goal of reaching 30GW by 2040.
Seven consortia submitted applications last year to bid in the country’s first auction, with strong interest from North Sea oil and gas majors.
After “thorough review” the Norwegian energy ministry confirmed that list has now been whittled down to five, consisting of:
- Aker Offshore Wind, BP and Statkraft
- Equinor and RWE
- Norseman Wind (EnBW)
- Shell, Lyse and Eviny
- Ventyr (Parkwind and Ingka Group)
It sees the exit of China’s Mingyang and Norway’s own Norsk Hydro from the process.
Shell bid in question
Despite its qualification, Shell’s Norway country manager Marianne Olsnes told an energy event earlier this week that the supermajor “might not bid,” according to a Reuters report.
The company has not made any final decision, but Ms Olsnes told the news agency that tender conditions were “very challenging” – in particular the need to oversee infrastructure building usually reserved for grid operators and the difficulty in finding a market for more expensive wind power.
The energy ministry had said it hoped to prequalify a minimum of six and a maximum of eight applicants. If fewer than six were pre-qualified, it would “consider whether to proceed” with the auction.
It has previously indicated the final award will be offered to a single bidder.
“Today, we can announce that several strong applicants have been qualified to participate in the auction for offshore wind for Sørlige Nordsjø II,” said Minister of Energy Terje Aasland.
“We have decided to proceed with the auction, which will begin on the 18th of March. I look forward to a good auction between these companies”.
The auction will open on Monday 18 March at 9am Norwegian time.
It will be conducted as an English auction with open bidding. Qualified players will compete for state support by submitting increasingly lower bids until one bidder remains. The player with the lowest bid in øre/kWh wins the auction, the ministry said.
Bidding will be closed to the public.
After the auction, the ministry will publish the winner and the winning strike price. This bid determines the strike price that forms the basis of the two-way contract for difference (CfD).
The successful consortium must then sign a contract within four weeks of the auction, or face a 400 million kroner ($38m) fine.
Launched in late March, the leasing round forms the first process as part of procurement of up to 4.5GW of wind capacity across the aforementioned area and a further area in Utsira Nord.
© Supplied by NPDUtsira Nord is an area of 380 square miles located northwest of Stavanger, which the government says is suitable for floating wind sites, while Sørlige Nordsjø II covers around 1,000 square miles bordering the Danish North Sea, where bottom-fixed turbines are more likely candidates.
However, last year the deadline for Utsira Nord was postponed until this year at the earliest, while Sørlige Nordsjø II was also extended into November 2023.
At the time, the ministry suggested the delays were the result of negotiations over state aid, and said it had begun the process of notifying state aid to the European Free Trade Agreement (EFTA) monitoring body ESA.