By Nora Buli
OSLO (Reuters) -Norway has launched the first part of its long-awaited inaugural floating wind tender, it said on Monday, offering subsidies to the winners despite the challenges faced by the global offshore wind industry.
The industry has grappled with skyrocketing costs, higher interest rates and supply chain bottlenecks, prompting governments to halt or postpone tenders due to a lack of interest from bidders.
In a first step, the process foresees bidders being awarded the rights to develop commercial projects of up to 500 megawatts (MW) in capacity at the Utsira Nord site off the country’s south-west coast.
The winners will then have two years to mature the projects before competing in an auction for subsidies in 2028-2029, to be provided as a direct grant.
“Utsira Nord is an important first step in the development of commercial floating offshore wind development on the Norwegian continental shelf,” Norway’s Energy Minister Terje Aasland said in a statement.
Norway has agreed to cap total subsidies at Utsira Nord at 35 billion Norwegian crowns ($3.37 billion), reflecting the technology’s relative immaturity.
“The model for allocating project areas and state support is adapted to floating offshore wind and will contribute to both technology development and cost reductions for subsequent projects,” Aasland said.
Norway is not part of the European Union but participates in the bloc’s internal market, requiring it to comply with EU rules, including on state aid, a process that is managed by the EFTA surveillance authority (ESA).
The latter approved Norway’s proposal to tender acreage suitable for floating wind farms at Utsira Nord in April.
Floating wind turbines are deemed particularly suitable for greater water depths where fixing the foundation into the seabed is not possible.
Norway awarded a first bottom-fixed offshore wind farm licence in 2024 but will focus solely on floating wind farm development when it next announces new tenders.
($1 = 10.3723 Norwegian crowns)
(Reporting by Nora Buli and Louise Rasmussen, editing by Stine Jacobsen, Kirsten Donovan)
