OSLO: Norway holds its first auction on Monday for the right to build a commercial offshore wind farm, offering up to 1.5 gigawatt (GW) of capacity, although interest has ebbed amid high project costs and there is still a risk of no bids being made.
“I hope for a good auction with several strong players who want to develop offshore wind at Soerlige Nordsjoe II,” Astrid Bergmaal, state secretary at Norway’s energy ministry, told Reuters.
Soerlige Nordsjoe II is close to Norway’s North Sea border with Denmark and some 200 kilometres (124 miles) from Norwegian shores. It is part of the government’s wider ambition to offer 30 GW of offshore wind capacity by 2040.
The descending-bids auction starts at 0800 GMT and offers state support through a 15-year contract for difference (CfD) nominated in Norwegian oere per kilowatt hour (kWh), and capped at a total of 23 billion Norwegian crowns ($2.17 billion).
Five groups pre-qualified for the auction in February but Germany’s EnBW has since confirmed that it will not participate.
“The key factors in EnBW’s decision were the requirement for the developer to build and own the high-voltage direct current transmission connector and the limitation of state support,” the company said.
The remaining groups are:
– Norway’s Equinor and Germany’s RWE
– State-owned utility Statkraft, Aker Offshore Wind and Britain’s BP
– Ventyr, consisting of Parkwind, majority owned by Japan’s Jera, and Ingka Group, the owner of most IKEA stores
– Shell and local Norwegian firms Lyse and Eviny
While Shell and others have raised questions over the project’s profitability, all four groups declined to say if they would bid when asked by Reuters.
The offshore wind industry is struggling with cost increases from rising interest rates and supply chain bottlenecks. Big names such as Orsted, Vattenfall, TotalEnergies and Iberdrola dropped plans to participate in the auction.
