Norway shortlists five bidders for offshore wind CfD auction
Maya Chavvakula
The Norwegian Ministry of Petroleum and Energy today [16 February 2024] further narrowed down the bidding pool for the county's inaugural offshore wind tender to five.
The five bidders will be invited to participate in a contract for difference (CfD) tariff auction in which the lowest bid is set to be awarded the state subsidy, as well as the rights to develop the 1.5GW Sørlige Nordsjø II offshore wind farm.
The bidders invited to participate in the CfD auction are:
- JV of Aker Offshore Wind, BP and Statkraft
- JV of Equinor and RWE
- Norseman Wind (Energie Baden-Württemberg AG)
- JV of Parkwind and Ingka
- JV of Shell, Lyse and Eviny
The CfD auction will open for bids on 18 March [2024], and a winner is expected to be announced before the end of the month.
The Norwegian authorities have largely adopted an "English style" auction of the CfD strike allocation with the difference being that in this process, the winning bidder sets the strike price as opposed to the State authorities inviting bids for a pre-set strike price as seen in the UK system.
The bidders in the Norwegian system will compete in a race to the bottom, and the developers proposing the cheapest tariff for the electricity generated will walk away with the rights to the wind farm.
Some bidders have already expressed concerns over the commercial feasibility of the project, with the likes of Shell hinting that it may drop out of the race due to "challenging" tender terms.
Norway launched the tender for Sørlige Nordsjø II – along with floating foundation tender Utsira Nord – in March [2023] with a bid deadline set for August.
The deadline was extended to today to allow the Norwegian authorities to finalise a potential subsidy scheme for the project.
Preliminary interest in the project came from "over a dozen contenders", according to sources familiar with the process.
The procuring authority, last November [2023], shortlist of seven bidders for Sørlige Nordsjø II with plans to wrap up the tender process and announce a preferred bidder by the end of this month [February 2024].
The timeline has now been pushed back to the end of March.
Bidders not progressed to the CfD phase are:
