Auction for Sørlige Nordsjø II opens 18 March 2024

- Today, we can announce that several strong applicants have been qualified to participate in the auction for offshore wind for Sørlige Nordsjø II. I look forward to a good auction between these companies, says Minister of Energy Terje Aasland in a press release.

Minister of Energy Terje Aasland says he will stick to the earlier annonced levels for state state support at NOK 23 billion over a 15 year periode.  Photo: Naina Helen Jåma NTB/Kommunikasjon.

The auction is a milestone in the plan to produce 30,000 MW from offshore by 2040, after the first areas on the Norwegian continental shelf were opened for offshore renewable energy production, in 2020.

Increased costs

The following consortiums qualified to participate in the auction:

• Aker Offshore Wind, BP og Statkraft
• Equinor og RWE
• Norseman Wind (Energie Baden-Württemberg AG)
• Shell, Lyse og Eviny
• Ventyr (Parkwind og Ingka)

The recent increase in costs in the global wind industry has made several players reluctant to invest in new offshore wind projects. It remains to be seen who of the qualified applicants are willing to take part in the auction. Swedish bank SEB estimates the development of Sørlige Nordsjø II will cost as much as EUR billion, while the state support amount to NOK 23 billion over a 15 year periode.

The first competitions for project areas for offshore wind on the Norwegian continental shelf were announced in March last year, and by November the ministry had received seven applications.

Meet criteria for sustainability and ripple effect

Five of these are now qualified to bid and have by that documented that they meet the minimum criteria for sustainability and positive ripple effects. These applicants also meet the prequalification criterion of implementation ability.

A study conducted by Menon Economics on behalf of Norwegian Offshore Wind, Export Finance Norway, Invest in Agder, Invest in Rogaland and Invest in Bergen has analyzed the potential economic ripple effect from the development of offshore wind.

The study suggests a significant opportunity for Norwegian installation and assembly ports, which collectively aim to achieve an installation and assembly capacity of 5 GW annually by 2030. For offshore wind parks being developed in the North Sea, there will likely be a demand for an installation and assembly capacity of up to 12 GW by 2030, nearly four times the existing capacity of 3.2 GW.

You can download the report here: 

The Menon report identifies to harbours in the Greater Bergen region can supply installation and assembly capacity for offshore wind development, Hanøytangen og Gulen Industrial Harbour. 

English auction

The auction will be conducted as an English auction with open bidding. In the auction, the qualified players will compete for state support by submitting increasingly lower bids until one bidder remains. The player with the lowest bid in øre/kWh wins the auction.

For competitive reasons, the bidding in the auction will be closed to the public. After the auction, the ministry will publish the name of the auction winner and the size of the winning bid (strike price). The winning bid determines the strike price that forms the basis of the two-way contract for difference.