Finally, what we have been waiting for! Opening for full-scale development of both floating and bottom fixed offshore wind in the Norwegian domestic market with up to 4.5 GW installed capacity. The news was announced by Minister of Petroleum and Energy Tina Bru during a boat trip organized by Norwegian Offshore Wind Cluster. The decision to open new areas means that developers could apply for project licenses from January 2021. Press release Norwegian Government.
With Utsira Nord, the infrastructure for building full-scale floating wind farms in a Norwegian home marked can be completed!
Utsira Nord means about NOK 20 billion in investment per 500 MW installed, whit up to 70% on Norwegian industry. With development of 4.5 GW in Norway, we are talking about investments of up to NOK 180 billion for the development itself. In addition, value creation will continue in the operation and maintenance phase.
Development of on Utsira North (1,010 square kilometers), and Southern North Sea II (2,591 square kilometers) are large industrial projects that will create many jobs in Norway. With 1 GW at Utsira Nord, Multiconsult (2012) estimates that 85,000 man-years are generated during the wind farm’s lifetime. If we estimate that up to 70% of deliveries will be in Norway, that means 2,380 full-time equivalents on average over a 25-year period only for this one development.
In the 1970s, the North-Americans wanted to develop and take full control of the oil and gas industry on the Norwegian continental shelf. Fortunately, we had vigilant politicians who made sure that this was in Norwegian hands, and we were able to build the necessary expertise and a strong supply chain. With an opening for the development of offshore wind in a Norwegian domestic market, we can now take advantage of the strong petro-maritime supply chain.
It took time before we made money in the oil and gas industry. We invested a lot of time and money in building the industry and developing the industry. Hopefully – we will see a parallell for floating wind. According to a report from Rystad Energy last week, investments in offshore wind in Northern Europe will be about the same as in oil and gas as early as 2021. In 2022, investments in offshore wind will be significantly larger than in oil and gas. And onward this trend is accelerating. Today, approx. 30 GW of offshore wind is built globally, of which 23 GW in Europe. The projections show an accelerating trend. In November 2019, the European Commission set a target of up to 450 GW offshore wind in Europe by 2050, of which 212 GW in the North Sea. And the EU envisages the development of a full 30 GW on the Norwegian continental shelf! A development of Utsira North and South North Sea II is a good start!
The Norwegian supply chain are already considerable suppliers to offshore wind in an international market. As an example, in 2019, almost 40% of Aibel’s order backlogs were in offshore wind. The world’s first floating wind farm Hywind Scotland, Norwegian companies accounted for 30% of the supply, and the turbines were assembled at Stord. But, it is first and foremost now that we define how strong the Norwegian supply chain will be, and how many jobs to be created. A report from Menon Economics from 2019, and the impact assessment related to the development of the floating offshore wind farm Hywind Tampen (88 MW), shows that it is very important that we gain experience as soon as possible with full scale development of offshore wind in a Norwegian domestic market in order to succeed globally as well. Therefore, today’s news is well received.
Now it is important to realize the possibilities. Financing mechanisms must be established to ensure that start-up decisions are made as quickly as possible, so that we do not lose unnecessary time in the global industrial race. We therefore have high expectations for this autumn’s state budget. This is very important for the skilled offshore supplier industry in Southern and Western Norway having a tough time in the oil & gas business.
The technology for floating wind is still immature. Therefore, it is important that we facilitate testing, research & development. The world’s first floating turbine Hywind I was installed at MetCentre outside Karmøy as early as 2009. That time by Statoil, but now taken over by Unitech Energy and made available for research and development through Sustainable Catapult. In this test area, more installations of new floating offshore wind technology are expected from next year.
But, first and foremost, we need experience with full-scale industrial developments of floating offshore wind. Only then we are able to develop a strong supply chain that can supply floating wind technology that competes with subsidy-free bottom-fixed offshore wind!