Major initiative to promote offshore wind power

Source: press release, 12 February 2022

Norwegian Minister of Petroleum and Energy, Marte Mjøs Persen
Norwegian Minister of Petroleum and Energy, Marte Mjøs Persen (photo: NTB Kommunikasjon/Statsministerens Kontor)

The Norwegian Government has announced plans to implement phase one of wind power production in the Southern North Sea II area. The electricity produced from these wind farms will be transmitted via subsea cable to the Norwegian mainland. The goal is to establish a model for allocating sea areas based on auctions.

“This is a solution that will increase the energy supply to southern Norway. The Government is working to ensure that Norway has access to abundant, renewable and affordable electricity, which will benefit Norwegian industry in the future and enhance value creation and employment across the country as a whole,” says Prime Minister Jonas Gahr Støre.

Phase one of Southern North Sea II will produce 1,500 MW, or roughly 7 TWh per year – enough electricity to power 460,000 households.

“The Government wishes to encourage greater investment in offshore wind power. Wind farms in the areas of Southern North Sea II and Utsira North will boost energy production in Norway. This will provide more electricity to meet the rising demand emerging in connection with the electrification of Norwegian society. It will promote technological development, generate cost reductions and spur innovation in Norwegian industry,” says Minister of Petroleum and Energy Marte Mjøs Persen.

Phase two of Southern North Sea II will produce another 1,500 MW. The Government will determine how to connect this additional electricity to the grid on the basis of a study on different grid alternatives for offshore wind power and their respective effects on the power system. The study will be carried out by the Norwegian Water Resources and Energy Directorate (NVE) in cooperation with Statnett.

The study will also look at the impacts on the power system of different grid solutions for offshore wind power connected to Norway and/or to other countries. This applies to cases where no new international connections that would boost export capacity from mainland Norway are anticipated. The study was commissioned from NVE and will be completed in the course of this autumn.

“Our aim is to ensure low electricity prices for the people of Norway. The Government has taken effective steps to address the situation in the electricity market through measures such as support for electricity customers, reductions in the electrical power tax, increased housing assistance, increased social assistance, increased support for students and more support for household energy efficiency measures. So, as we now work to expand offshore wind power, we will not be looking to establish new international cables that increase energy export capacity from mainland Norway,” says Minister of Finance Trygve Slagsvold Vedum.

Auction to be the main model for allocating sea areas
The Government intends to develop the auction model as the primary means of allocating areas for renewable energy production at sea. The Ministry of Petroleum and Energy will now start work on designing an auction model for realising phase one of the Southern North Sea II field.

The Government will move forward with the plans for regulatory changes needed for the auction solution and area allocation process that were circulated for review in summer 2021. The Government will submit a proposal to the Storting [Parliament] in the course of spring 2022 for amendments to the Offshore Energy Act and the appurtenant regulations.

Consultation on division of the area
The Ministry of Petroleum and Energy has now begun a consultation process on the proposed division of the areas to be allocated in Utsira North and Southern North Sea II. The proposal takes into account both environmental interests and coexistence with other business interests. The Ministry is seeking input from the wind power industry, other users of the areas and other interested parties on any adjustments to the areas and on which areas will be most suitable for development.

Identifying new areas for offshore wind power
In the long term, offshore wind power development will be dependent on access to sea areas. The Government is seeking to establish a predictable framework for the business sector by opening the door to more projects after Southern North Sea II and Utsira North. The Ministry of Petroleum and Energy will commission NVE to identify new areas for renewable offshore energy production based on input from an internal directorate-level committee and draw up a recommendation for an impact assessment programme. This work will take 9 to 12 months. Impact assessments will then need to be carried out before any new areas can be opened.

“Norway’s workforce, engineers and supplier industry are among the best in the world. With our expertise and access to clean power, we have the potential to become a green industrial giant. The industrial projects to be developed at Southern North Sea II and Utsira North can help make this happen,” says Minister of Trade and Industry Jan Christian Vestre.