Concern about the Norwegian auction – E24

There were no bids from offshore wind companies at the UK renewable energy auction on Friday. – It also creates concerns about whether we will get bidders at the Norwegian auction, says John Evange at Fornybar Norge.

There were no bids from offshore wind companies at the latest UK renewable energy auction.

There is a deep scratch in the paint on UK investment in offshore wind, he writes Financial Times.

Britain plans to triple the island nation’s offshore capacity to 50 gigawatts by 2030.

– This is a sign that offshore wind is currently very bumpy, internationally, says head of offshore wind John Evang at industry organization Fornibar Norge.

– Offshore wind has in many ways been hit by a perfect storm of costs. He says there have been general increases in costs, particularly related to the war in Ukraine, as well as strong pressure on supply chains now that all countries must reach their 2030 targets.

The UK Department for Energy Security points out the same.

“There were similar results in countries such as Germany and Spain, as a result of increased inflation and challenges in supply chains that created challenges for projects to participate in this round,” the ministry wrote in a note. message.

Not sure about the Norwegian offerings

The UK auction caps government aid for offshore wind projects at £44 per megawatt hour, measured at 2012 prices, According to Reuters. Modify to economic inflation This corresponds to approximately 80 ø per kilowatt-hour.

Norway’s upcoming offshore wind auction was originally supposed to have a state aid cap of €66 per kilowatt-hour. However, the Storting has RemovalRemovalThe government will first update the subsidy ceiling (reservation price) from €66 per kilowatt-hour to €90 in a letter to Parliament on May 10, and will then abolish the reservation price in a new letter to Parliament on May 31. The majority in Parliament ended up removing the support ceiling. Therefore, it will only become clear at the auction what players will demand for offshore wind development This ceiling. Maximum offshore wind support was in June more From NOK 15 billion to NOK 23 billion. The question is whether it is enough for any bids to come through.

Roger Pedersen, director of the Norwegian Offshore Wind Division at the Norwegian Maritime Industry Organization, is still unsure whether there will be bids in Norway’s upcoming 2nd Southern North Sea offshore wind auction in February 2024.

– We are still not sure about the terms contained in the CFD that was concluded Adopted by Parliament Before the summer ensures sufficient competition in the bidding round. We know that many associations will apply for pre-qualification, but whether they will actually participate in the auction is uncertain, he says.

– They’re worried

– Do we risk having no bids in the Norwegian auction?

– I’m worried about that. These are difficult times for offshore wind in general, and it also creates concerns about whether we will get bidders at the Norwegian auction, says specialist director John Evange at Fornybar Norge.

– Should something be done with the auction system?

– Through parliamentary action, the financial arrangement of Sørlige Nordsjø II has been improved. But it remains to be seen if it is good enough.

– It remains to be seen

– It is an expression that everything has become more expensive lately, says MP Nikolai Astrup (H) about the missing tenders in Great Britain.

– Turbine prices in Northern Europe have risen by 30 to 40 percent, there are major capacity issues with cable suppliers, and inflation and expensive time are playing their role in weakening the profitability of projects. All this uncertainty affects the desire to invest.

– Do we risk that no one will bid in the offshore wind auction in Norway?

– Yes, we risk it. It remains to be seen whether any bids will be received, or whether larger support of up to NOK 23 billion will be needed to implement the Southern North Sea II project. I hope the offers come in and we get started, and the costs will come down over time. But the situation now is difficult, says Astrup.

The Conservative Party wants a bigger development at Sørlige Nordsjø II than the government has proposed. The Conservative Party also wants to link wind energy to Europe in the hope of making the projects more profitable. The government will connect offshore wind to Norway only.

However, Astrup believes the Norway auction should now go according to plan, out of respect for those who have spent so much time on it.

– If there is no interest in the current framework conditions, the government should figure out what it wants to do next, says Astrup.

-You should hang your head in shame

Dan McGrail, leader of industry organization RenewableUK, believes alarm bells should be ringing in the UK government. With a higher level of support, the auction could provide up to five gigawatts of offshore wind, or about 20 TWh per year provided 4,000 hours of annual full operation.

– The fact that more offshore wind is not guaranteed is a hard blow to consumers, says one message.

Keith Anderson, chief executive of Scottish Energy, told the BBC: This is a missed opportunity and a warning to the authorities. Alistair Phillips-Davies, chief executive of energy company SSE, agrees.

“At this auction, unfortunately, the prices were set very low,” says Phillips-Davies To the BBCRadio show today.

Labour’s Ed Miliband believes the government has been warned that the auction cap is too low.

He told the BBC: “They should lower their heads in shame.”

Great interest in solar energy

As for other renewable energy sectors, the auction went well. There were bids in the auction for onshore wind, solar and tidal power.

A total of 95 projects received bids, up from 93 projects in last year’s round. This corresponds to 3.7 gigawatts of clean energy, enough to power about two million homes.

Half of this year’s total capacity is secured by new solar projects, while land-based wind projects account for approximately 1.5 gigawatts.