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Ventyr wins first Norwegian offshore wind auction

By: Chloe Emanuel 20/03/2024 North Wind Research

Corporate General Windfarms

The Ventyr consortium, composed of Parkwind (Belgium) and the Ingka group (Sweden) won the first Norwegian offshore wind auction for the development of a wind power project in the Sørlige Nordsjø II area. The winning bid was at NOK 1.15/kWh.

“This successful auction is a testament to our commitment, and I congratulate Ventyr SN II AS on their win. We look forward to our continued collaboration as we embark on this new phase,” said Prime Minister Jonas Gahr Støre at the press conference announcing the news.

The auction, which began on Monday 18 March, allowed qualified participants to compete for state support. In accordance with the Offshore Energy Act, competition for project areas is mandatory, with auctions serving as a means to minimise state subsidies. The next steps involve finalising a contract within four weeks between the State and the consortium. This contract will outline the modalities of the subsidies. The winner will be granted the project area and the exclusive right to conduct a project-specific impact assessment and apply for a concession under the Offshore Energy Act.

The Norwegian Parliament has set a cap of 23 billion kroner for state support in this initiative.

Comments by the Minister of Energy Terje Aasland during the press conference seem to indicate that the subsidies will be awarded following the contract for difference model. Because of high initial investments, wind power assets are more exposed to financial distress in periods of low power prices than other methods of generation (such as gas). Contracts for difference solve this misalignment by having the company and the government agreeing on a fixed price for the power produced. When the actual price of power is lower than this agreed price, the government pays the difference. When it is higher, the company gives the excess to the government. If prices are negative, there is no production and no compensation.

The Norwegian government’s ambitious plan involves allocating areas equivalent to 30 GW of offshore wind power by 2040.

For more information about offshore wind farm projects across the globe, click here.

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Ventyr wins first Norwegian offshore wind auction

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