Norway – By 2040, the Norwegian government hopes to have 30 GW of offshore wind capacity.
The announcement gives Europe’s floating wind industry a boost. However, there is still some uncertainty about the licensing schedules and auction design. It’s also unknown how much electricity will be exported to Europe’s mainland.
Norway’s Prime Minister, Jonas Gahr Stre, stated that by 2040, the country plans to allocate 30 GW of offshore wind capacity. This will generate nearly as much new electricity as Norway currently consumes in total. The new wind farms will be built over the course of the next 20 years. There are currently no commercial-scale offshore wind farms in Norway. They have, however, identified two development zones and intend to hold an auction for a 1.5 GW floating wind farm in one of them next year. They’ll now work on identifying additional zones and streamlining the permitting process for offshore wind farms.
In Norway, offshore wind will be a mix of traditional bottom-fixed and floating wind farms. As a result, the new announcement is a significant boost for Europe’s floating offshore wind industry. Only three floating wind farms with a total capacity of just over 100 MW are currently operational in Europe. Several more are in the works or in the planning stages. Governments across Europe are announcing significant new floating wind targets.
The announcement is also good news for the offshore wind industry in Norway and Europe. More commercial-scale wind farms will contribute to the expansion of Europe’s floating wind supply chain and further lower floating wind costs. According to a recent Menon Economics study, floating offshore wind could create up to 52,000 new jobs in Norway by 2050. Norway is already a leader in the development of floating wind technology and will benefit from a robust domestic market for the technology. According to the Menon Economics study, Norwegian players could take 5-14 percent of the global floating wind market, amounting to €9.5 billion in revenue.
Uncertainties exist
The Norwegian government intends to allocate the additional sea space in stages. According to them, the next round of offshore licensing will begin in 2025. However, there is still uncertainty about how the government’s plans will be carried out: Norway lacks a precise expansion target for 2030, as well as a clear licensing and auction schedule for the years up to 2040. The precise distinction between bottom-fixed and floating projects is unknown. To ensure the necessary predictability to unlock wind energy investments, clarity on licensing schedules and auction design will be critical.
WindEurope also urges the Norwegian government to speed up the development of wind farms in the first two zones, Utsira Nord and Srlige Nordsj II, by clarifying auction rules and timelines, as well as grid and transmission arrangements.
Norway could become a major exporter of renewable electricity to mainland Europe due to its location and large sea space. The Norwegian government has stated that it will look into “a variety of grid solutions.” Each project call will consider cables with two-way power flow, radials to Europe, and radials to Norway.
Belgium, Denmark, Germany, and the Netherlands committed in the recent Esbjerg Declaration to jointly develop 150 GW of offshore wind in the North Sea and to collaborate on innovative grid solutions such as hybrid offshore wind farms and energy islands. Norway should seek to collaborate with those EU countries, as well as the other way around. They can build the future North Sea offshore grid together – and with the UK – to improve cross-border electricity flows and strengthen Europe’s energy security.
The fishing industry, local communities, and other important sea space users will be involved in the allocation of new offshore wind areas by the Norwegian government. The government will assess the impact of operational wind farms on fishing and other maritime industries between each allocation round. The government is also looking into different ground tax models for offshore wind to ensure that a portion of the profits are distributed to local communities.
