Norway

Norway

Investors pull plug on Norwegian 350MW project

Demise of Havsul confirms offshore wind 'on hold'

Seven regional Norwegian utilities will take a NKK200m hit (€27.2m), having decided to abandon plans for the country’s first full-scale offshore wind farm.

Licensed in 2009, Havsul 1 was to herald the beginning of a new industrial sector in Norway, with the country’s highly-profitable oil and gas industry on hand to lend its offshore technical and commercial expertise. The project was based on a design featuring ten 5MW turbines.

But the absence of a viable business case for the project meant it languished on the drawing board, failing to secure adequate investment.

As Windpower Offshore has reported, virtually all of Norway’s domestic energy demand (99%) is met by hydropower, with its gas sector geared toward exports. Until Norway is able to export offshore wind-generated electricity, it seems unlikely that much, if any, offshore wind capacity will be built. The offshore wind sector has been on hold – albeit unofficially – for some time.

Havsul 1’s developer is Vestavind Offshore, a joint venture that includes utility companies such as Haugaland Kraft and Sunnhordland Kraftlag. Vestavind Offshore had hoped that one of Norway’s major offshore oil and gas players would invest in the project. Indeed, Norwegian legislation allowing significant write-offs against revenue from petroleum production was conceived precisely to attract a company such as state-owned Statoil.

Instead, Statoil has chosen to invest in UK offshore wind projects and in developing floating platform technology for the global offshore wind market.

Announcing the demise of Havsul, Vestavind Offshore chair, Wenche Teigland, said that she could see no way to attract investment given the country’s existing policy framework, which encourages onshore wind farms and research and development, but that is insufficient to support commercial offshore wind development.

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