Norwegian Government Drops Auction Model for Floating Wind Lease Area

The Norwegian Government has proposed the sites in the Utsira Nord lease area to be allocated based on qualitative criteria, rather than through an auction. The area is one of the two Norway will soon offer to developers and has been deemed most suitable for floating wind technology.

Norwegian Ministry of Petroleum and Energy

The qualitative criteria entail facilitating innovation and technology development, which differs from the allocation model to be employed for the other area, Sørlige Nordsjø II, whose sites will be awarded through an auction.

The Government said the offshore wind players had pointed out that great uncertainty and risk associated with new technology and cost calculations for floating wind make an auction an unsuitable allocation model for the Utsira Nord area. 

The industry has also emphasised qualitative criteria as the preferred allocation model, with clear and objective criteria and an aim to facilitate the development of the supply chain.

“By allocating the area on Utsira Nord according to qualitative criteria, we will facilitate innovation and technology development that can contribute to cost reductions for floating offshore wind”, said Norwegian Minister of Petroleum and Energy, Terje Aasland.

Norwegian Ministry of Petroleum and Energy

In its most recent update on the rules for the upcoming offshore wind leasing, the Norwegian Government also said it decided to give Statnett the responsibility for planning the offshore grid in accordance with guidelines given by the Ministry of Petroleum and Energy and based on input and dialogue with offshore wind operators.

Last month, the Government revealed further details about the offshore wind auction at the Sørlige Nordsjø II zone, saying the 3 GW of fixed-bottom capacity at Sørlige Nordsjø II would be auctioned off in two 1.5 GW phases.

The auction for the first 1.5 GW of capacity is expected to take place during this year.

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The Government opened the pre-application period last year after identifying the two sites for the development of up to 4.5 GW of floating and bottom-fixed offshore wind capacity in 2020.

The government said that Utsira Nord, an area of 1,000 square kilometres located northwest of Stavanger, was suitable for floating wind power, while Sørlige Nordsjø II, covering some 2,590 square kilometres and bordering the Danish sector of the North Sea, was deemed suitable for bottom-fixed wind power turbines.

Last year, the Ministry of Petroleum and Energy said the process for selecting projects at the deepwater Utsira Nord area will be different from the one at Sørlige Nordsjø II.

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