Norway

Norway

Norway puts domestic offshore wind on hold

International projects will be priority until costs drop

The list of Norwegian companies active in the global offshore wind industry is a sizeable one, but they are not building projects at home. The country boasts just a few MWs in offshore capacity, with no sign this will increase soon.

Low-cost hydroelectric power easily meets the nation’s domestic electricity needs and the high cost of offshore wind means there is no financial motivation to build offshore turbines and use Norway’s interconnector cables with its neighbours to export such power, as it does gas.

Project fails to progress

The 350MW Havsul l project was due to be the country’s pioneer offshore wind farm concession and was permitted in 2010. The 78 turbine project has languished ever since, with the newspaper Stavanger Aftenbladet reporting in August that Havsul 1 developer, Västavind Offshore, had unsuccessfully courted oil and gas firm, Statoil, in search of capital. Repeated attempts by Windpower Offshore to contact Västavind Offshore met with no response.

Asked to comment on the future of Havsul 1, a spokesperson for the Ministry of Petroleum and Energy, told Windpower Offshore, that "the cost of offshore wind energy has to be brought down to compete with hydropower and onshore wind energy".

To illustrate this point, the ministry compares the cost of UK offshore wind energy, which equates to about NKK1300/MWh (€176/MWh), with the cost of Norwegian hydroelectricity, at NKK300/MWh (€40.5/MWh).

As the sixth largest hydropower producer in the world, Norway ranks number one in hydropower production per capita, with 99% of electricity generated in the country produced by hydroelectricity projects.

Norway has no wind energy capacity targets, although a green certificate scheme operating across Norway and Sweden is expected to encourage construction of new onshore wind farms. But the scheme is not expected to drive offshore wind development, since it favours expansion of lowest-cost forms of renewable energy generation.

Showcase project

Despite this, many Norwegian technology companies would like to see a domestic offshore wind farm built, if only to showcase the sector’s potential. Arena Norwegian Offshore Wind (NOW), an umbrella organization serving 50 companies involved in the offshore wind industry, has lobbied for construction in Norwegian waters.

"Norway needs a certain minimum level of activity as a stepping stone and showcase, says Asle Lygre, Arena NOW’s general manager.

The organisation argues that Norway’s offshore oil and gas platforms should be connected to the land-based grid. This would both eliminate the burning of fossil fuels to operate the platforms and provide offshore wind turbines installed on or near platforms with subsidised grid connections.

But just one platform has been linked to the land, thus far, and given the high cost associated with subsea cabling Lygre cannot yet see a political breakthrough to release capital for further grid connections.

"The lack of offshore wind activity in Norwegian waters is easy to explain: domestically we do not need power and the financial incentives are too weak," adds Lygre.

For now, big names from Norway’s business community – including Statoil, Statkraft, DNV and Fred Olsen – will continue to gain offshore wind experience in markets such as the UK, Germany and the USA.

In the longer term, deep waters off Norway could prove an excellent location for floating offshore wind platforms. By the time the cost of floating wind technology has fallen significantly, Norway will likely have additional high voltage connections to its European neighbours. This would allow it to store larger volumes of surplus offshore wind-generated electricity produced in other parts of Europe as well as offering potential to export electricity from any floating offshore wind projects the country may have built by then.

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