The external assessment of Norway’s support scheme for a 500-MW floating offshore wind project in Utsira Nord was published along with the country’s 2027 state budget on Wednesday, as previously indicated by the government.
In addition, the government said it is making two adjustments to the draft support agreement. It will reduce the penalty for abandoning the project before the investment decision and pay out some of the state support earlier in the project implementation.
The external review was requested by the parliament in June, raising concerns about delays to development. Norwegian Offshore Wind yesterday commended the Ministry of Energy for its efficiency.
“The government has followed up the decision quickly, thoroughly and within a timeline few thought possible,” Norwegian Offshore Wind’s CEO, Arvid Nesse, said. The organisation even said that the process led to “a healthy and visible mobilisation” and that the assessments provided extra confidence.
The review included several assessments, covering the potential for technology development, value creation, effects on power prices and the risk to the state.
The state support is capped at NOK 35 billion (USD 3.66bn/EUR 3.26bn) and cannot be increased. According to the assessments, a 500-MW project is estimated to cost about NOK 29 billion, while annual operating costs are calculated at about NOK 880 million.
Two consortia — Equinor and Vargronn, as well as EDF power solutions and Deep Wind Offshore — can compete for the state aid. Each was awarded 500 MW areas in Utsira Nord last December.
Under the newly announced adjustments, the penalty for abandoning the project is set at NOK 500 million until an investment decision is made and at NOK 2 billion after the investment decision. The payments to the developer will be up to 10% of the support upon investment decision, 20% upon first power delivery and 70% when the facility is completed.
(NOK 1 = USD 0.105/EUR 0.093)
