BREAKING: Norway Opens First Offshore Wind Tenders for Applications
Norway’s Prime Minister Jonas Gahr Støre and Oil and Energy Minister Terje Aasland have officially opened the application window for Norway’s first offshore wind auction.
The combined capacity offered in the first auction round is 3 GW split equally across two areas on the Norwegian continental shelf: Southern North Sea II (Sørlige Nordsjø II) and Utsira Nord.
Southern North Sea II
The rights to develop the first phase of the Southern North Sea II will be awarded to one candidate through a pre-qualification round followed by an auction and award by the end of 2023.
The minimum capacity proposed must be 1,400 MW, and the maximum capacity 1,500 MW.
In the pre-qualification round, applicants must document that they have satisfactory technical competence, financial strength, and meet relevant requirements for health, environment and safety through the pre-qualification criteria implementation ability, sustainability and positive local ripple effects. Applicants who are prequalified will then have the opportunity to participate in the auction.
There will be a minimum of six and a maximum of eight bidders who may participate in the auction.
The Ministry of Petroleum and Energy will submit a proposal to the Storting for authorization to enter into a bilateral Contract for Difference with the successful candidate. The government’s support through the Contracts for Difference will be limited through an upper ceiling.
The Southern North Sea II tender is being carried out using the so-called English auction model, with the bidder with the lowest bid price (NOK øre/kWh) selected.
The capacity at Utsira Nord will be awarded to three bidders through a competition based on qualitative criteria. The award of the contracts will take place by the end of 2023.
The competition, based on qualitative criteria, will, among other things, facilitate innovation and technology development in floating offshore wind.
Utsira Nord has been opened for a capacity of 1,500 MW, the minimum capacity of individual bids must be 460 MW, and the maximum capacity 500 MW.
The applicant with the highest score will be allocated their preferred project area, the applicant with the second highest score will be allocated their preferred project area among the remaining two project areas, and the applicant with the third highest score will be allocated the last project area.
After the allocation of the project areas, the selected developers must investigate and mature the areas further, before a competition for state aid is carried out.
Two of the three projects will be awarded state aid and an option to increase the capacity of the projects to 750 MW. One project will not be offered state aid.
The two projects to receive state aid will sign a 15-year Contract for Difference with the government, according to the Ministry’s proposal.
The project that does not receive support will retain the right to the area for a period of time, can make use of the general instruments, and will be able to participate in any future competitions such as state aid for offshore wind, the government said.
”The government’s ambition is to allocate areas for 30,000 MW from offshore wind by 2040, that is to say roughly as much as all of Norway’s power production last year. Now the starting shot goes off, and it is important that we continue to keep the pace up,” said Prime Minister Jonas Gahr Støre.
The application deadline for Sørlige Nordsjø II is 4 August 2023 and for Utsira Nord is 1 September 2023.
”We are now looking forward to many good applications from relevant developers, so that we can allocate the project areas later this year,” said Oil and Energy Minister Terje Aasland.
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