Norway is set to forge ahead with the inaugural phase of the Sørlige Nordsjø II offshore wind farm, as it secures approval for financial assistance from the EFTA Surveillance Authority (ESA). This significant development comes on the heels of the Norwegian authorities formally notifying ESA in December 2023 about their intention to provide aid for offshore electricity generation in the Sørlige Nordsjø II area, situated in the Norwegian sector of the North Sea.
The approved financial aid pertains specifically to the initial phase within the broader development plan for Sørlige Nordsjø II, also known as Southern North Sea II. This assistance will be structured as a two-way contract for difference (CfD), wherein the government undertakes to bridge the gap if the market price falls below the predetermined strike price offered to the project beneficiary. Conversely, should the market price exceed this strike price, the government stands to receive the surplus.
A competitive process will determine both the selected beneficiary and the intensity of the aid, with interested parties required to meet qualifying criteria for participation in the tender. The criteria for awarding the aid will be based on the bidder presenting the lowest strike price, measured in NOK per kWh.
The Norwegian Ministry of Petroleum and Energy, to be renamed the Ministry of Energy effective January 1, 2024, will be responsible for dispensing the aid. The comprehensive budget allocated for the entire initiative is NOK 23 billion. This financial injection aims not only to boost renewable energy production but also to foster innovation and contribute to technological and industrial advancements.
The initiative aligns with Norway's commitment to achieving emissions reduction targets and advancing the nation's transition toward clean energy. The approval of this scheme, following constructive dialogue between ESA and Norwegian authorities, adheres to the guidelines outlined in the European Commission's Temporary Crisis and Transition Framework.