Preben Willoch
Partner
Oslo
Newsletter
Criteria and model for awards for offshore wind
Published:
The Ministry of Petroleum and Energy (MPE) has today, Tuesday 6 December 2022, announced a proposal for pre-qualification criteria, auction model and a possible support scheme for the first phase of Southern North Sea II, in addition to proposal for qualitative criteria and support scheme for Utsira North. Furthermore, the MPE also provided an overall status and some information on the further process for the first project. The deadline for hearing responses is 6 January 2023.
In June 2020, two areas on the Norwegian Continental Shelf were opened for offshore wind activities, Utsira North and Southern North Sea II. See earlier newsletter from 23 June 2020. This was followed up by the MPE in June 2021 when they published a White paper on offshore wind licenses and proposed amendments to the Offshore Energy Act and the Offshore Energy Regulations, with a consultation process during the fall of 2021. See earlier newsletter from 11 June 2021. In February 2022 the MPE proposed how to divide the opened areas into acreages that can be licensed. Today's proposal is an important step towards establishing offshore wind in Norway and the ambition by Government is to have the first wind mills ready in 2029 and a production of 30 000 MW within 2040.
State Support scheme
The Government is aiming at awarding the first phase of Southern North Sea II without any state support, but the proposed award model reflects that the area may be awarded both with and without state support. The MPE is of the opinion that a two-sided contract for difference is the preferred support model for the first phase of Southern North Sea II, and proposes a support period of 15 years.
For Utsira North, the MPE does not stipulate a preferred support model but asks for input on whether an investment support or a two-sided contract for difference is most suitable.
Award model
Auction is stipulated as the main model for award of acreage for Southern North Sea II, and any participant must be pre-qualified in order to apply. The pre-qualification criteria that are proposed are related to ability to deliver, sustainability and positive spin-off effects.
For Utsira North the award of acreage will be based on qualitative criteria and the preferred model includes that award of acreage and award of state support will be in two steps; 1) award of acreage based on qualitative criteria and ii) competition for state support as part of the concession process. The proposed qualitative criteria relate to cost level 2023, contribution to innovation and technology development, ability to deliver, sustainability and positive spin-off effects.
Read the press release here.
