Norway has awarded its first North Sea wind farm license to a group made up of IKEA store owner Ingka and a Japanese power joint venture, with the first electricity production expected in 2030, the energy ministry and companies said on Wednesday.
The government hopes the auction for the right to build 1.5 gigawatts (GW) of capacity in the North Sea using bottom-fixed wind turbines will be the starting point for massive offshore power developments in the years leading up to 2040.
“This is a milestone for the government’s offshore wind ambition,” Energy Minister Terje Aasland told a news conference.
The winners of the three-day Soerlige Nordsjoe II tender, bidding as Ventyr group, beat a joint rival offer from Norway’s Equinor and Germany’s RWE, the only other group to bid among the five groups that were pre-qualified.
“This achievement underscores our commitment to driving positive change through renewable energy innovation,” Ventyr project manager Jorne Bluekens said in a statement.
Norway is aiming for 30 GW of installed offshore wind capacity by 2040 as it seeks to move away from fossil fuels to cut greenhouse gas emissions.
Equinor shares rose after the tender announcement – a sign that some investors feared Norway’s biggest company could end up spending too much on projects less profitable than its oil and gas business and were relieved it did not win.
But Equinor will continue to pursue other offshore wind options in Norway, a senior executive said.
“We participated in the auction with the goal of winning at a price level where we could develop a good and profitable offshore wind project,” Equinor Executive Vice President Paal Eitrheim said in a statement to Reuters.
“Now the result of the auction shows that another player has a lower bid than us, and we must accept that,” he added.
Ingka Group, the owner of most IKEA stores, owns 49 per cent of Ventyr, with the rest controlled by Parkwind, majority owned by Japan’s Jera, a 50-50 joint venture between a unit of Tokyo Electric Power Company (TEPCO) and Chubu Electric Power.
Ventyr said the first turbines are expected to be operational in 2030 but did not elaborate on how long it would take to complete the wind farm. It declined to say how much it would cost.
The descending-bids auction resulted in a subsidy for the winner of 1.15 crown ($0.1076) per kilowatt hour of electricity under a 15-year contract for difference (CfD) capped in advance at a total of 23 billion crowns.
Germany’s Energie Baden-Wurttemberg had pulled out of the process ahead of the auction. The remaining groups that did not bid were a consortium of Aker Offshore Wind, BP and Statkraft and a joint project by Shell, Lyse and Eviny.
Aasland said Ventyr’s owners had formed a “solid group” with necessary funds and expertise.
“The IKEA family group is a key source of financing and has a sustainability strategy they want to carry out. And Parkwind, which was acquired by Japanese owners, has broad experience with ocean wind and other power projects,” Aasland said.
Ingka Group’s investment arm has spent heavily on wind and solar energy in recent years and aims to reach €6.5-billion in such investments by 2030, to produce 15 terawatt hours of energy. “We are really pleased to continue our investments in renewable energy and support the wider transition towards net-zero,” Ingka Investments Managing Director Peter van der Poel told Reuters.
Ingka is involved also in other wind projects offshore Norway. It last year joined a consortium that aims to bid for the development of the planned Utsira Nord floating wind farm.