Dalsøyra, Norway, June 21, 2024 (Lusa) - Norway's Equinor believes that, due to the high cost of floating technology, one condition of the offshore wind auction that the Portuguese government intends to launch should be state support for the projects in the form of contracts for differences.
"These projects are going to need a type of state support, of the kind that we normally prefer, which is something called two-way contracts for differences," Equinor Renewables' director of business development for Europe, Natalja Altermark, told reporters during a visit by a Portuguese delegation to the Dalsøyra facility near Bergen, Norway, where the Norwegian state energy company is servicing wind turbines at the Hywind Scotland floating farm, the first of its kind in the world and which has been in operation since 2017.
Equinor was one of the 50 companies that formalised their expression of interest in the offshore wind auction that the government intends to launch, but the model, conditions and dates of the process are not yet known.
When asked what conditions the auction should include to make it interesting for a group like Equinor, Natalja Altermark pointed to the issue of subsidising the projects through two-way contracts for difference (CfD), commonly used in the energy sector, in which the producer sells the electricity on the market, but later settles the difference between the market price and the strike price previously agreed with the public entity and in which any surplus revenues are distributed to end customers.
"Floating offshore wind is still a more expensive technology than anchoring to the seabed, and in Portugal, as in Norway, due to the soil conditions and depth, it will be necessary, I think, for almost 95% of what can be installed offshore to have floating technology," explained the Equinor official.
Natalja Altermark also pointed out the need to reduce the risks associated with the maritime areas that will be put up for auction, which have to coexist with fishing activities.
"We need to understand the social, economic and environmental impact that the project will have, so the more we can work with the authorities to have this risk reduction process to develop the areas, the better for us," she emphasised.
In addition to this, she considered it advantageous that the auction includes large-scale projects.
"It will be more difficult, not just for Equinor, but for any promoter to invest if we only see one project. If there's a pipeline of projects coming in, it's easier to start investing in a new market like Portugal," he said.
Norway aims to produce 30 gigawatts (GW) of offshore wind energy by 2040, and Equinor, which is responsible for around 70% of the country's oil and gas production, has set itself the goal of increasing installed renewable energy capacity to 12 to 16 GW by 2030, largely through large-scale offshore wind projects.
*** Lusa travelled to Norway at the invitation of the Norwegian Embassy in Lisbon *** MPE/ADB // ADB.
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