OSLO (Nettavisen): After just over two days of auctioning, Norway’s first offshore wind auction is over.
The winner is Ventyr, consisting of Belgian Parkwind and Ikea’s investment company Ingka. They have won the competition with a guaranteed electricity price of 115 øre without taxes.
Among other things, Ventyr has recently completed a project of 47 offshore wind turbines off Taiwan.
– This is a day of joy for Norwegian energy history, says Prime Minister Jonas Gahr Støre.
– It is a success and a milestone, says Terje Aasland. – It is a very strong winner. The contract must be signed within four weeks.
115 øre is the winning bid. According to Dagens nårsetliv, the other company that bid is Equinor in partnership with RWE.
Large amounts of electricity
– It will have ripple effects for the Norwegian supplier industry, says Aasland.
When the project will start is unclear, says Aasland when asked by Nettavisen.
– It is up to the consortium to set this up. We will facilitate fast processes, says Aasland.
And that can be good news for the electricity bill.
– More power is coming into the grid and this can have an impact on electricity prices.
It was highly uncertain in advance whether bids would be received, but at least two players have kept things going:
– This means that we have hit the right spot, because we have several actors now bidding for the development, says Oil and Energy Minister Terje Aasland (Ap) to Today’s business.
The Belgian consortium has a Norwegian partner, Norsea. Terje Aasland tells Nettavisen that the development will be important for Norwegian jobs.
– The Norwegian supplier community is well positioned to participate in contract competitions. We have an environment in Norway for fixed installations. I think we can see the consequence of direct and indirect jobs that will be about Norway. That power further develops business life on land. If we had not done this, we would have lost this opportunity. Now we win the opportunity that will be important for offshore wind in the future.
At the industry organization Offshore Norway, they have clear expectations.
– That there will be jobs is certain, says managing director Hildegunn Blindheim of the industry organization Offshore Norway and also points out that their member Norsea Group is the Norwegian partner of the winning consortium in the offshore wind auction.
This company is a supplier of supply chain solutions and has many bases and port facilities in Norway.
Only four fought for the contract
Originally, the government hoped that this first project would be able to be built without any form of subsidies, but in the auction that starts on Monday there is an opening to hand out NOK 23 billion.
There are four players who are qualified to take part in the auction:
- Statkraft, Aker Offshore Wind and BP
- Equinor and German RWE
- Ventyr, consisting of Parkwind and Ingka
- Shell, Lyse and Eviny
Light illuminates Europower that they did not participate in the auction.
This is what they fought over
The auction is a purely economic auction, where the players bid on the size of a so-called “contract for difference”. In practice, this means that the state will guarantee a selling price for the electricity produced over a period of 15 years.
Whoever wants the lowest guaranteed electricity price wins.
The government will then pay out the difference between the market price and the guaranteed price.
The state can, for example, guarantee that developers receive 100 øre per kWh for the electricity they produce. If the market price is 70 øre, the state will pay the remaining 30 øre. However, if the price is higher than the guarantee price, it is the developer who must pay the state.
The ceiling on payments from the state is set at NOK 23 billion + inflation over 15 years.
It is unclear when it will be possible to build
The fact that the auction is now over does not mean that the project will actually be built. For example, Equinor has recently withdrawn from a contract they entered into to build in New York.
– We take it for granted that this project will come to fruition, said Aasland on Wednesday.
When asked by Nettavisen when this project will start, Aasland replies as follows:
– It is up to the developer to answer this. What we are facilitating are efficient and thorough decision-making processes both now and in other developments. We want to have an effective base to carry out a development of 30 GW up to 2040 Wednesday.
Nettavisen also spoke to the energy minister earlier this winter.
– Will there be any deadlines for when the project will be finished?
– We want to have this done, we need that power. So the fact that they cannot sit on the project indefinitely is important.
– But there will be no clear deadlines?
– No, we are not saying that this should be in production in 2030. But we will set up our decision-making processes in such a way that it is clear if they want to build until 2030.
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The case is updated.