Norway Completes First Offshore Wind Auction with Ikea Franchisee and Jera

Norway compelted its first offshore wind auction as the new government puts a high priority on the sector (Ingka Group)

PUBLISHED MAR 20, 2024 3:47 PM BY THE MARITIME EXECUTIVE

 

 

Norway completed its first offshore wind auction by selecting a partnership between the investment arm of Ingka Group, based in the Netherlands and the largest Ikea franchiser, and Parkwind, majority-owned Japan’s Jera, a partnership between Tokyo Electric Power Company and Chubu Electric Company. Government officials called the auction a milestone in their efforts to develop offshore wind saying that they have taken a big step forward.

Five groups had qualified for the auction, but in the end, it came down to spirited bidding between the Ventyr consortium and Norway’s Equinor in partnership with RWE. Statkraft, Aker Offshore, and BP, a group led by Shell, and Germany’s Energie, all withdrew or failed to submit bids. Bidding began on Monday and the government continued it into Tuesday before the Ventyr group was declared the winner.

“This is a very good day. This government has worked to realize offshore wind in Norway since day one, and today we have carried out the first successful auction,” said Norway’s Prime Minister Jonas Gahr Støre. “Norway has ocean areas with rich wind recourses, and a supply industry with world-leading technology expertise. We will build on this fundament in the coming years by announcing new areas and new auctions.”

The first location, known as Sorlige Nordsjo II is distant from the Norwegian coast approximately 124 miles into the North Sea near the border with Denmark. It however is one of the few areas that Norway will be able to offer that can use fixed-bottom turbines. A second proposed auction for a site using floating wind turbines was delayed but Norway is already exploring other potential sites.

The bidding was based on a contract for difference (CfD) where the government will provide support, capped by the parliament at 23 billion Norwegian crowns ($2.17 billion). The final strike price for the electricity in the auction is approximately $100 per megawatt hour in a 15-year contract.

Ingka, which is supporting the development of renewable energy through its investment company, said its goal is to have the first turbines operational by 2030. The plan is to develop a 1.5 GW wind power farm.

The consortium now has four weeks to complete and sign the contracts with the Norwegian government. 

Norway’s energy minister highlighted that the new government is giving a higher priority to wind energy. It is a big step for a country that historically has been one of the largest gas producers. The government says it wants to lead the transition to renewable energy believing that Norway has areas with the potential for more than 30 GW of offshore wind production by 2040.

Gulf of Mexico

BOEM Proposes Second GoM Wind Auction Possibly Adding Hydrogen Production

BOEM is moving forward exploring more wind energy leases for the Gulf of Mexico (file photo)

PUBLISHED MAR 20, 2024 6:52 PM BY THE MARITIME EXECUTIVE

 

The U.S. Bureau of Ocean Energy Management is moving forward to explore the next round of wind energy auctions in the Gulf of Mexico. They plan to release tomorrow the details for four potential lease areas off the coast of Louisiana and Texas. As part of the proposals, they are looking at adding alternative energy products such as the production of hydrogen as part of the wind lease.

The proposals total over 410,000 acres in the current drafts which BOEM estimates could potentially power 1.2 million homes. The four leases are in three blocks west of the first site that was won by RWE in the 2023 auction. The new proposals range in size between approximately 97,000 acres and 108,230 acres, although the final scope of each lease will be determined after a 60-day comment period running till May 20. 

As part of the review, BOEM reports it is also seeking comment on potential lease revisions to include the production of hydrogen or other energy products using wind turbine generators on the lease.

BOEM is requesting feedback on various aspects of the proposed lease areas, including the size, orientation, and location of the four lease areas and which areas, if any, should be prioritized for inclusion or exclusion from the proposed lease sale. BOEM is considering lease stipulations to ensure that communities, particularly those that are historically underserved, are considered and engaged early and often throughout the offshore wind energy development process.?Proposed bidding credits include funding for fisheries compensatory mitigation and workforce development. 

 

The proposed second auction would feature four leases contained in the western blocks defined in the Gulf of Mexico (BOEM)

 

The auctions would be conducted simultaneously for each of the four lease areas, which are in the western portion of the Gulf of Mexico near Houston, Texas. If BOEM decides to proceed with the auction, the next step would be the publication of a final sale notice.

The first Gulf of Mexico wind auction conducted in August 2023 failed to attract strong interest from the industry. RWE was the only bidder paying just $5.6 million for one of the three areas, while saying that it was still considered how the site might be developed long-term. 

Analysts highlight that the Gulf of Mexico features slower wind speeds and higher hurricane risks versus areas previously offered off the New England and Atlantic coast. Further, Gulf Coast states generally have lower electricity prices and no state purchase mandates to support the offshore wind energy industry.

 wind turbine installation vessel 

First Look at U.S.’s Only WTIV Under Construction in Texas for Dominion

Charybdis under construction in Texas March 2024 (BOEM)

PUBLISHED MAR 20, 2024 7:54 PM BY THE MARITIME EXECUTIVE

 

The first image appeared of the much-celebrated wind turbine installation vessel being built for Dominion Energy at Keppel AmFELS shipyard in Brownsville, Texas. The vessel will be the first, and possibly only, Jones Act-compliant wind turbine installation vessel and is slated to be used with Dominion’s Coastal Virginia Offshore Wind project as well as charters to Ørsted for installation of some of its U.S. projects.

Named Charybis, the vessel was billed as state-of-the-art, and a major advancement for the U.S. industry. There was a lot of discussion about the vessel when its keel was laid in December 2020, but since then it has received less attention as reports surfaced that it was running behind schedule and over budget.

The U.S. Department of the Interior is providing the first glimpse of the vessel today, March 20, showing the status of construction. Principal Deputy Assistant Secretary for Land and Minerals Management Dr. Steve Feldgus, Bureau of Ocean Energy Management Director Elizabeth Klein, and Bureau of Safety and Environmental Enforcement (BSEE) Deputy Director Paul Huang toured the construction today at the shipyard in Texas.

Contained within Dominion Energy’s annual report filing to the U.S. Securities Exchange Commission in late February are details including a $625 million cost estimate, up from the around $500 million reported in 2020. Original reports said the vessel would be ready around the end of 2023, although BOEM commenting on today’s inspection said that it has an anticipated construction completion by late 2024 or in 2025.

It was reported in 2021 that the installation vessel was being chartered to Ørsted for work on the Revolution Wind and Sunrise Wind projects in the Northeast U.S. Both of those projects are still moving forward although potentially delayed by financial and supply challenges, but Ørsted is proceeding with the projects after having canceled others in the United States.

BOEM said after its tour that the Charybdis when completed will be based out of Hampton Roads, Virginia, and operated by a U.S. crew to support the installation of Coastal Virginia Offshore Wind. Dominion's construction plan approved by BOEM calls for the vessel to be deployed between Q2 2025 to Q2 2027 at the Virginia wind farm construction site.

The Charybdis was designed to be able to handle the current and next generation of wind turbines going up to approximately 14.7 megawatts and larger. The vessel will have a length of 472 feet, making it one of the largest WTIVs yet built, and built with more than 14,000 tons of domestic steel, mostly sourced from Alabama, North Carolina, and West Virginia. It will be capable of the installation of foundations for the turbines and other heavy lifts including the turbines. 

Built in the U.S., the vessel has unique advantages as it will be fully compliant with the Jones Act cabotage rules. The Charybdis will be able to make frequent trips to U.S. ports to load and transport materials to the installation sites. Other U.S. projects are using an alternative approach of chartering foreign vessels which are precluded from transporting the materials and which will be dependent on barges and feeder operations to move materials from the staging sites at the wind ports to the offshore locations. Dominion told BOEM that it expects Charybdis to be
"sought after for offshore wind turbine installation contracts for other projects in the U.S."

Last year, the Biden administration highlighted that the wind sector led companies to announce 18 offshore wind shipbuilding projects as well as investments of nearly $3.5 billion across 12 manufacturing facilities and 13 ports to support the American offshore wind supply chain. 

In addition to the Charybdis, the vessels include a rock installation vessel, a SOV, and crew transfer vessels. Last week, Maersk Supply Service and Edison Chouest announced an agreement for the construction of tugs and barges for their feeder system. 

The vessels for the offshore wind sector are being built at shipyards ranging from Texas to Pennsylvania, Florida, Louisiana, New York, Massachusetts, Michigan, Rhode Island, and Wisconsin. The first of the crew transfer vessels have been completed and delivered while the SOV was recently moved from the building hall in preparation for it to be floated. 

Port Hawkesbury Paper Wind addresses turbine concerns

MULGRAVE — From the danger of “infrasound” to the annoyance of “shadow flicker,” almost nothing about Port Hawkesbury Paper’s (PHP) forthcoming wind project escaped scrutiny at a meeting of Mulgrave town council on March 4.

A delegation from PHP Wind, led by Roger Myette – the project’s construction manager and co-chair of its community liaison committee – spent more than an hour updating elected reps on timelines and key milestones, and addressing common fears about the technology. 

Referring to an issue raised by a member of the initiative’s recently formed community liaison committee about oil leaking from wind turbines’ gearboxes, he said, “One thing I know you are all probably wondering is what’s the worst thing [about this] for pollution and contamination. One point that was asked was [whether] they contaminate the ground by spilling millions of litres of oil.”

“That’s not the case,” he said, noting that the turbines PHP plans to use are manufactured by Chicago-based Nordex, which pioneered the mass production of turbines for sale around the world in 1995. In these units, “The cell where all the oil is fully self-contained and includes the transformer, generator and gearbox.”

Other resonant fears among those living close to turbines, he said, concern the “whoosh” or “swish” of the blades and something called “shadow flicker,” which is the effect of the sun, low on the horizon, shining through the rotating assembly, casting a moving shadow.

“We’ve done all the studies,” Myette said. “The modeling assumes worst case scenario for every aspect, every input, and nothing is outside the allowables. It’s a very light whisper when you’re outside [your] house. Inside, you won’t hear it. As for shadow flicker, [these turbines] won’t be near houses, so there’s no impact.”

The Goose Harbour Lake Wind Farm – which received environmental approval from the province last year – will be located on Municipality of the District of Guysborough (MODG) land near the communities of Upper Big Tracadie and Lincolnville that is under license to PHP for sustainable forest management.

The facility – which will need access to public roads owned by the Town of Mulgrave – will consist of up to 31 wind turbines and is expected to have an annual capacity equivalent to more than 40 per cent of PHP’s required electrical power demand when it is operational sometime in 2025 or later.

Alec Bruce, Local Journalism Initiative Reporter, Guysborough Journal