Norway sets ambitious goals for offshore wind

Offshore wind licenses representing approx. 1% of Norwegian ocean waters, or 30 000 MW will be awarded within 2040 announced the Norwegian government in a press conference May 11th. This goal represents nearly a doubling of Norway’s total current renewable energy production and is far beyond the levels of ambitions previously stated by the Government.

Offshore wind licenses representing approx. 1% of Norwegian ocean waters, or 30 000 MW will be awarded within 2040 announced the Norwegian government in a press conference May 11th. This goal represents nearly a doubling of Norway’s total current renewable energy production and is far beyond the levels of ambitions previously stated by the Government.

Row of offshore wind turbines.

Licensing areas – The government further announced that the next licensing round for new licensing areas will take place in 2025. The government will take a step-by-step approach and new areas will be gradually opened towards 2040. No short-term production or licensing targets are, however, set at this point in time. This to the industry’s frustration.

Grid – The high production target cannot be handled by the existing Norwegian grid system and is premised on a portion of the production being exported to Europe. This raises, yet again the question of grid, which the government only addressed in part, stating that all types of grid solutions (hybrid, radial to Norway and radial to Europe) will be considered for each of the coming licensing rounds. For the first development of Sørlige Nordsjø II (1500 MW) the government stands by its earlier decision that the produced electricity will be transmitted via subsea cable to the Norwegian mainland only. The industry has unsurprisingly responded that there needs to be further clarification on this point, including Norway’s position on cooperating with other nations in the development of common offshore grid network.

Licensing regime – the government will also be examining how to increase the efficiency of the licensing regime, specifically considering processing the licensing application and detail plan at the same time. The industry appears pleased with the concrete proposal and more generally reiterates the need for such parallel processes. Haavind sees further opportunities for licensing efficiency and awaits expectantly, alongside the industry, on the finalization of the licensing regime.

Financial – the introduction of a resource rent tax on offshore wind will also be considered going forward with the aim of ensuring that profits from the industry will benefit Norway as a whole. The government remains otherwise silent about other critical financial regulations (tax regime, mortgage regulations etc.), but stated the additional allocation of 70 MNOK for studies within Sørlige Nordsjø II and Utsira Nord which will be included in the revised national budget which was announced today.

Overall, the announcement does not represent any major shift for the offshore wind industry. It does however set a more ambitious goal and a clearer timeline. In visual terms Norway will go from two to an estimated 1500 turbines in about 20 years, requiring a high tempo for both the state in the awarding of licensing and the industry in developing and completing projects in the near future.

Link to the press release can be found here (Norwegian only).

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