Seven companies apply for pre-qualification for the Southern North Sea II

The Norwegian Ministry of Petroleum and Energy received seven applications within the deadline of 12.00pm on November 15th, 2023. Pre-qualification is the initial phase of the tender process.

Summary

Southern North Sea II is a planned bottom-fixed wind project located in the North Sea offshore Norway with a developed capacity of up to 1,500 MW.

The main points of the text are:

  • The project is part of the Norwegian government’s ambition to allocate areas for 30,000 MW of offshore wind production by 2040, which can generate almost as much electricity as the entire consumption of Norway today.

  • The project has attracted several strong players who have applied to participate in the auction round, but also faced some challenges and withdrawals due to the high costs and difficulties in the offshore wind industry.

  • The project has received increased support from the government, which has raised the maximum support from 15 billion to 23 billion Norwegian kroner.

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The Southern North Sea II (Sørlige Nordsjø II) project represents a crucial step in the region's commitment to advancing sustainable and renewable energy sources. Although it may be argued that the number of applicants should be deemed positive, it should also be noted that several major players have pulled out.

In 2020, the first areas on the Norwegian continental shelf were opened for offshore renewable energy production. Since then, the authorities have been working to establish the regulatory framework. On March 29th 2023, the first project areas for offshore wind in Utsira Nord and Southern North Sea II were announced.

The planned bootm-fixed offshore wind project of 1,500 MW gigawatts in the Southern North Sea II area is expected to deliver around seven terawatt-hours (TWh) of electricity annually. Despite significant cost increases in the global offshore wind industry recently, there are several strong players applying to participate in the auction round for Southern North Sea II.

Companies and consortia that have applied are the following:

  • Aker Offshore Wind, BP, and Statkraft
  • Equinor and RWE
  • Hydroelectric Corporation
  • Chinese Mingyang Smart Energy
  • Norseman Wind (consortium with Norgesgruppen and German EnBW)
  • Belgian Parkwind and Ikea group's investment company Ingka
  • Shell and the Norwegian power companies Lyse and Eviny

In the application, applicants must document that they meet the minimum criteria for sustainability and positive spin-off effects. Furthermore, the applicant shall be assessed on the prequalification criterion of implementation ability. The department will now start the process of evaluating the applications. Those who qualify can submit bids during the offshore wind auction. The tentative date for this is set for February 2024.

Several companies have withdrawn

The offshore wind industry has been under significant pressure lately. There has been numerous negative news regarding cost increases, challenges in the supply chains and delays. There is also an anticipated shortage of installation vessels. In addition, the conditions for developing Southern North Sea II are challenging. As a result of this, several major companies that previously expressed interest chose to withdraw from the prequalification.

High ambitions for offshore wind

The Government's ambition is to allocate areas for 30,000 MW of offshore wind production by 2040. This involves the construction of 1500 turbines over a period of 20 years. This can generate almost as much electricity as the entire consumption of Norway today. The Southern North Sea II project is an important component in the process of achieving the government's long-term goals for the offshore wind industry. The government has now increased the maximum support for the Southern North Sea II project from 15 billion to 23 billion Norwegian kroner.

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