挪威离岸风电机遇-Norways 300 GW offshore wind opportunity

Norway’s300GWoffshorewind

opportunity

August2023

ByRobertHjorth,AnneMarthineRustad,KlaraRåbu,

SverreLindseth,andJensGjerrild

BostonConsultingGrouppartnerswithleaders

inbusinessandsocietytotackletheirmost

importantchallengesandcapturetheirgreatest

opportunities.BCGwasthepioneerinbusiness

strategywhenitwasfoundedin1963.Today,

weworkcloselywithclientstoembracea

transformationalapproachaimedatbenefitingall

stakeholders—empoweringorganizationstogrow,

buildsustainablecompetitiveadvantage,and

drivepositivesocietalimpact.

Ourdiverse,globalteamsbringdeepindustryand

functionalexpertiseandarangeofperspectives

thatquestionthestatusquoandsparkchange.

BCGdeliverssolutionsthroughleading-edge

managementconsulting,technologyanddesign,

andcorporateanddigitalventures.Weworkina

uniquelycollaborativemodelacrossthefirmand

throughoutalllevelsoftheclientorganization,

fueledbythegoalofhelpingourclientsthriveand

enablingthemtomaketheworldabetterplace.

Contents

00Letterfromtheauthors

01Europeneedsallthewindpower

itcanget

02Norwayisuniquelypositioned

foroffshorewind

03Thegovernmentshouldseta

stretchtargetof300GW

04Thiswillbethelargestindustrial

shiftsincethe1970s

05FloatingwindinNorwaywillbe

competitiveby2040

06Becomingaleaderinfloating

windrequiresactionnow

07BCG’sNordicoffshorewind

team

Letterfromtheauthors

Wearewitnessingclimaterecordsatanunprecedented

pace.Evenif2023isanoutlier,itonlyconfirmsthealarm-ingtrendofhuman-inducedglobalwarmingandunder-

scorestheurgencytophaseoutfossilfuels.Theworld

needsenormousamountsofrenewableenergy,andalargeshareofthatneedstocomefromoffshorewind.

Atthesametime,theoffshorewindindustryisenteringitsfirstcrisis.Costsaresoaring,attemptsarebeingmadetorenegotiatecontracts,andprojectsarecanceled.Critics

havewindintheirsails,andwithinthepublicdebatethereisanegativesentimentaroundtheviabilityandcostof

offshorewinddevelopment.

Amidallthis,Norwayhasstarteditsoffshorewindjourney.Itwasalatestart,andtimingmightseemunfortunate,buttheindustryismobilizedandenergized.

Inthisreport,webringforwardsixkeymessages,eachdetailedinseparatechapters:

1

2

3

4

5

6

Europeneedsallthewindpoweritcanget.Mostofthisneedstocomefromfloatingoffshorewindinareasbeyondcurrentdevelopmenthotspots.

Norwayisuniquelypositionedforoffshorewind.

ThereispotentialtosupplyEuropewithlarge

amountsofsecure,affordable,andcleanenergy,aswellastoexportpioneeringfloatingwindsolutionsandtechnology.

Thegovernmentshouldsetastretchtargetof300GW.Europeneedstheenergy.Itwillbegood

businessforNorway,anditwillmakethefirst30GWcheaper.

Thiswillbethelargestindustrialshiftsincethe1970s.Newsupplychains,ahigh-capacityoffshore

grid,andfloatingwindfactoriesalongthecoastareneededtodeliverontheambition.

FloatingwindinNorwaywillbecompetitiveby2040.Double-digitlearningrateswillleadtoalevel-izedcostofenergyoflessthan45€/MWhby2040forfloatingwind.Projectsawardedattheendofthis

decadewillbesubsidy-freeandprofitablefordevelop-ers,andtheindustrydevelopmentwillhaveapositiveNPVof600billionNOKfortheNorwegianstate.

Becomingaleaderinfloatingoffshorewind

requiresactionnow.Thesocioeconomicupsideis

significant,providing150,000jobs,870billionNOK

annualenergyexportrevenuegenerated,and400

milliontonsofannualCO2equivalentsabated.Howev-er,thereisnotimetolose,andboththegovernmentandtheindustrymustactnow.

Norwayisfacingauniqueopportunitythatcouldequaltheoilandgasindustrydevelopmentthatstartedhalfacentu-ryago.NotonlycanNorwaymeetitsownclimatetarget

andsupportEuropeinachievingtheirs,butitcanalso

continueitsroleasavitalpartnerforEurope,providing

secure,affordable,andcleanenergy(electricityandgreenmolecules).Incomeandjobscanbesecuredforfuture

generations,particularlyincoastalcommunities.With

appropriatemechanisms,thepowerpricecanbestabilizedataconsistentlylowerlevel,benefittingconsumersand

newindustriesalike.Allofthiscanhappenwhilemaintain-ingminimalimpacttonature.

Thisshouldbeawinningformulaforpoliticiansfromanyparty,butittakescourageandrequiresswiftaction.Ifwe

wait,othercountrieswilltaketheleadandleavetheNor-

wegiansupplychainbehind.Ourcalltodecision-makersistobeboldandactfast.Prioritizelong-termclimate,nature,andeconomicbenefitsovershort-termpublicopinion.

Norwayisatthedoorstepofauniqueopportunity.Wehaveonechance—let’stakeit.

RobertHjorth

ManagingDirector&Partner

AnneMarthineRustad

Principal

KlaraRåbu

ProjectLeader

SverreLindseth

Partner

JensGjerrild

ProjectLeader

BOSTONCONSULTINGGROUP5

1|Europeneedsallthewindpoweritcanget

Large-scalerenewablescanmeetEurope’senergyneeds

In2019,theEuropeanCommissionsetabolddecarboniza-tiontarget:netzeroby2050anda55%emissioncutby

2030comparedto1990levels.However,projectionsindi-cateonlya60%reductionby2050atthecurrentpace.

Toachievethesetargets,Europe’senergymixmustfundamentallychangefrommainlyfossilfuelstodaytoprimarilyrenewableenergyin2050(seeExhibit

1).Electrificationoftransport,heating,andindus-try,togetherwithhydrogenproduction,willbethekeydriversofemissionreductions,andleadtoin-creaseddemandforgreenelectricityproduction.

Russia’sinvasionofUkraineandtheNordStreamattackshavedemonstratedhowvulnerableourenergysystemis.Energysecurityistopofmindforpoliticians,andtheaddi-tionalrenewablegenerationcapacitymustbebuiltin

Europe.Withtherightapproachandscale,therenewableexpansioncansolveEurope’senergytrilemmaandensuresecure,affordable,andcleanenergyforthefuture.

Wind’spivotalroleintheenergytransition

SeveralsourcesofrenewableenergyareneededtoenablethedecarbonizationofEurope.Windandsolarwillbethemostimportanttechnologies,withatenfoldincreasein

installedcapacityin2050comparedtocurrentlevels.

NORWAY’S300GWOFFSHOREWINDOPPORTUNITY

Windpowerwilllikelyconstitutearoundhalfofthein-

stalledcapacity,translatingto2,000GWtoreachthenet

zerocommitment.Thisestimateisinlinewiththatof

WindEuropewithasomewhathigherprojectionforgreen

hydrogenproduction.

Today,Europehas225GWinstalledcapacityofonshore

windand30GWofoffshorewind.Underthecurrentpolicy,

anadditional400GWofwindpowerisexpectedtobe

installedby2050.NineNorthSeacountriesaretakingthe

leadbycommittingtoacombinedtotaloffshorewind

capacityof120GWby2030and300GWby2050through

theOstendDeclaration.

However,thereisstillasubstantialgapof1,350GW

tobeclosed,mostofwhichmustbefilledbyoffshore

windgivenacreagelimitationsandpublicresistance

toonshorewindandsolar.Europeneedstolookto

countriesandseaareaswiththenecessarycondi-

tions,space,energyinfrastructure,andknow-how

todevelopandhousetheadditional1,350GW.

Potentialareasforoffshorewindcanbefoundinmanysea

areasinEurope.Ofthese,theNorwegiancoastalareasin

theNorthSea,NorwegianSea,andBarentsSeahave

extraordinaryproperties,suchaslargeavailableareaswith

suitablewaterdepthsandabundantwindresources.These

areashavegreatpotentialforfloatingoffshorewind.

Exhibit1|2,000GWwindcapacityisneededby2050tosatisfyEurope'snetzerocommitmentwitha1,350GWinstallationgap

Windpowercapacityneededtoreachnetzeroby2050(GW)

Primaryenergymixtoreachnetzero

by2050(TWh)

-25%

~20,000

~2,000

~650

~250

~15,000

~400

~1,350

2020

2050

2050ProjectedGap

SolarWindOtherrenewables

NeededInstalledProjectedGap

BioenergyNuclearOilGasCoal

Source:BloombergNEF;EnerdataGlobalEnergy&CO2database;BCGanalysis

BOSTONCONSULTINGGROUP7

2|Norwayisuniquelypositionedforoffshorewind

Norwayiswellpositionedtotaketheleadinlarge-scaleoffshorewind,withexceptionalwindresources,astrongsuppliernetwork,amplecapital,andabilitytomitigatepotentialdownsides.

Thebestwindresourcesandabundantsuitableareasforwind

Oneoftheworld’sbestwindresources:TheNorwegiancoast-alareasrankamongtheworld’sfinestlocationsforfloat-

ingoffshorewind.First,thewindblowsoftenandstrongly.Second,thevastgeographicalareaallowsforsignificant

spacingbetweenwindturbinesandbetweenwindfarms,minimizingnegativewakeeffects.Theresultingcapacity

factorsof50–60%makeacompellingbusinesscase,asthecostperMWhproducedislow.Third,windsinthenorth

arelargelyuncorrelatedwiththoseincontinentalEurope,makingtheproductionmorevaluablesinceitcanmeet

Europeandemandwhenthewinddoesnotblowonthecontinent.

Abundantspaceforwind:Norwayhasoneofthelongest

coastlinesintheworld,andtheNorwegianeconomiczoneandterritorialwaterssprawlacrossmorethan850,000

squarekilometers(excludingareasrelatedtoSvalbardandJanMayen).TheNorwegianWaterResourcesandEnergyDirectorate(NVE)hasidentifiedlow-conflictareaswiththepotentialtohostbetween200and400GWofoffshore

windalongtheNorwegiancoast(seeExhibit2).Thesug-

gestedareasoccupymerely6%oftheNorwegianwaters,leaving94%untouched.Thus,itispossibletofacilitate

harmonicco-existencewithfisheries,maritimetraffic,andotheraffectedstakeholderswhileensuringthatnatureandtheenvironmentareproperlysafeguarded.ThisisalignedwithMulticonsult’sestimateofupto338GWoffshore

windpotentialinlow-conflictareas.

Thefjordsareideallysuitedforfloatingwindfactories:

Deep-waterquaysincalmwatersareneededtomanufac-turefloatingfoundations.Onceassembled,theyneed

storageuntilsuitableweatherpermitsoffshoretowingandinstallation.Norwegianfjordsareuniquelysuitedtomeettheseneeds,offeringbothdeep-waterquaysandample

storage.Inaddition,localavailabilityoflimestoneforcon-cretefoundationsreducestheenvironmentalfootprintandtransportationcost.

Awell-establishedsupplierindustrytoscaleoffshorewind

Supplierindustry:Norwayhasaccesstooffshoreexpertisefromtheoilandgasindustrythatcanbeleveragedacrosstheentireprocess,fromplanningtobuildingandoperatingoffshorewindfacilities.Thisincludesmanufacturingfloat-ingfoundations,supplyinginstallationvesselsandinstalla-tioncapabilities,developingmooringsystems,andofferingmaintenanceandservicesinharshoffshoreenvironments.

Facilities,workforce,andinnovation:Norway’sexistingship-yards,oilandgasyardsandfacilities,andcoastalinfra-

structurecanberepurposedtoaccommodatetheoffshorewindfactoriesneededtoscaletheindustry.Theworkforcehasextensiveexperienceinoffshoreenvironments,and

Norwayishometoworld-leadingmaritimeresearchcom-munitieswithrobustindustryties.

Accesstocapitaltojump-starttheindustry

Initialinvestmentcapital:TheNorwegiangovernment’ssignificantfinancialpowercanbeleveragedtoestablish

theoffshorewindindustry.SubsidiesandeffectivepoliciesareneededtoincentivizedevelopmentofthelocalsupplychainandattractinternationalcompetenceandcapitaltoinvestheavilyinNorway.Thetaskistoinvestenoughto

ensurethatNorwaytakesaworld-leadingpositioninfloat-ingoffshorewind,yetnotsomuchthatNorwayfinances

theentirecostreductiononbehalfoftheglobalindustry.

Provenmodelforinfrastructure:Thestate-ownedgasinfra-

structureoperatorinNorway,Gassco,isawell-proven

modelforinfrastructurethatcouldbeappliedtooffshore

windaswell.Astate-ownedoperatororcoordinatoroftheoffshoretransmissiongridcandistributetheinfrastructurecostacrossawidenumberofprojectstoensureequitableandfairaccessforalldevelopers.Itcanmoreefficiently

monitorandsafeguardthecables.Itwillreduceprojectriskfordeveloperswilllowerthecostofprojectdevelopment.

Norwaycanmanageandmitigatepotentialdownsidesofoffshorewind

Tomitigateandmanageenvironmentalimpacts,Norwayshouldfollowstrictenvironmentalstandardsforoffshorewindmanufacturingandinstallation.Thiswillnotonly

minimizedirectlocalimpactonmarineecosystemsbutalsostimulateinnovationandenvironmentalsolutionswithpotentialglobalapplications.

Floatingwindislessinvasivethantraditionalbottom-fixedoffshorewinddevelopments.Itavoidsintrusiveseabed

piling,cangivemarinelifeshelterandimprovehabitats,andsimplifiesthedecommissioningprocess.

Exhibit2|300GWofoffshorewindpossibleintheareassuggestedbytheNorwegianWaterResourcesandEnergyDirectorate(NVE)

Source:NorwegianWaterResourcesandEnergyDirectorate(NVE)

NORWAY’S300GWOFFSHOREWINDOPPORTUNITYBOSTONCONSULTINGGROUP9

11

3|Thegovernmentshouldseta

stretchtargetof300GW

300GWshouldbeNorway’sstretchtarget

Europerequiresanadditional1,350GWofwindpowertoreachnetzeroby2050.GivenNorway’sprimepositioningforfloatingoffshorewind,webelieveNorwayshouldsetastretchtargetof300GWby2050,withclearinterimtargetsfor2030and2040.

Therationalebehindastretchtargetof300GWhassever-almaincomponents.NVEandMulticonsulthaveindicatedthatthereisspaceforapproximately300GWinlow-con-

flictareas.GenuinecommitmenttooffshorewindinNor-waywillhelpalleviatethecurrentsupplychaincrisis.A

substantiallyhighertargetthan30GWisnecessaryto

establishanewindustrywithalocalvaluechain.Anambi-

tiousbuildoutof300GWwillbringlargesocialandeco-

nomicbenefitstoNorway.Andfinally,replacingoilandgaswithelectricalpowerandderivativemoleculesfromoff-

shorewindwillensurethatNorwaycanremainoneofEurope’skeyenergypartners.

Supplychaininvestments:Abindingtargetandtransparentroadmapforbuildingsubstantiallymoreoffshorewindin

Norwaywillhelpalleviatethesupplycrisis.DeveloperswhoarecurrentlyreevaluatingtheirpresenceinNorwaywill

commitfullytobuildingapositionandinvestinginthe

localsupplychain.Supplierswhoarecurrentlystrugglingwillbeabletoconvincetheirownerstocommitcapitaltoinvestinginproductionfacilitiesthatcanreducebottle-necks.

NORWAY’S300GWOFFSHOREWINDOPPORTUNITY

toelectrifyMelkøya.Mandatingoffshorewindtoprovidetheadditionalpowercouldhavekick-startedtheoffshorewindindustryinthenorth.

Bytheendofthisdecade,developersareexpectedtoseeprofitablebusinesscases,eliminatingtheneedforfurthersubsidies.Andastheindustryevolvesandcostsarere-

duced,developerswilllikelybewillingtopayconcessionfeesforsitesratherthanseeksubsidies.

Thefirst30GWofoffshorewindareneededinNorwaytomeetthedomesticdemandforelectricity.Ina30-GW

scenario(thegovernment’scurrenttarget),thesubsidy

needwillbesubstantiallyhigherthaninascenariowhere300GWisthetarget.Thisisbecause30GWwillnotpro-videthenecessaryscale,learning,orstandardizationto

significantlyreducethelevelizedcostofenergy(LCOE)ofNorwegianfloatingwind.

Newindustry:Afirmcommitmenttotheoffshorewind

industrywillcatalyzeinvestmentsinNorway’soffshore

windvaluechainandnurturetheemergenceoflocally

developedtechnologieswiththepotentialforexport.Me-

nonEconomicsprojectsthat40GWoffloatingwindcould

generate50,000newdirectandindirectjobsinNorwayby

2050.Onthisbasis,weestimatethata300GWambition

couldprovide150,000jobswhenfactoringinanticipated

efficiencyimprovements.Thisrepresents75%ofthework-

forceemployedinNorway’soilandgassectorasof2022

andwouldthereforebemorethanenoughtoemploythe

oilandgasprofessionalswhowillneednewjobsinthe

comingdecades..

Exportrevenues:Annualexportrevenuesareprojectedto

reach870billionNOKwith300GWinoperation.This

figureisconservative,consideringonlythedirectrevenue

fromenergyexport.Alocaloffshorewindindustrywillalso

leadtosignificantexportoftechnologyandcapabilitiesto

therestoftheworld.Floatingoffshorewindisstillana-

scentindustry,andNorwaycantakealeadingroleindevel-

opingthetechnologyandsolutionsneeded.

EnergypartnerforEurope:In2021,Europeimported55%of

itsconsumedenergyaccordingtoEurostat.By2050,Eu-

rope’sneedforrenewableenergyisexpectedtosoarto10

timestoday’sdemand.Theenergyexportfrom300GWof

offshorewindissimilarintermsofenergyamounttothe

anticipatedreductioninoilandgasexportfromNorwayby

2050.Byamplifyingitsoffshorewindefforts,Norwaycan

remainoneofEurope’skeyenergyprovidersandsolve

Europe’senergytrilemmabyprovidingsecure,affordable,

andcleanenergy.

Whileweview300GWasanoptimaltargetforNorway,

bothintermsofsupplychaincapacityandseaareaavail-

ability,noteworthybenefitscanstillberealizedatlower

levels,suchas200GW.

Subsidiesareneededforthefirstprojects

Aninvestmentof115billionNOKinsubsidieswillbe

neededtomakethefirstfloatingwindprojectsprofitable

fordevelopers.Thesubsidiesarenotafinancialhindrance

forNorway,astheycorrespondtoonly~0.3%ofNorway’s

nationalbudgeteachyearthatsubsidiesarepaidout.

Moreover,thesubsidyrequirementcouldbereducedby

mandating(andatthesametimeincentivizingthrough

effectivepolicies)theoilandgasoperatorstodecarbonize

operationswithpowerproducedbyoffshorewind.The

recentdecisiontoapproveelectrificationoftheMelkøya

LNGplanthighlightsamissedopportunityforpromoting

offshorewind.Theregionneedsadditionalpower,and

severaldevelopershaveannouncedplansforoffshorewind

BOSTONCONSULTINGGROUP

4|Thiswillbethelargestindustrialshiftsincethe1970s

Thelargestindustrialshiftsincethe1970s

Scalingthefloatingoffshorewindindustryandreaching

300GWofinstalledcapacityby2050willundeniablybeanambitiousindustryendeavor.Toachievethis,weneedto

installanambitious15–17GWofcapacityannuallyfrom2040onward.Thistranslatestoproducing15–20founda-tionseveryweekthroughouttheyearandinstalling35–40turbineseachweekduringsuitableweatherwindows(seeExhibit3).Themanufacturingandinstallationwillinvolvethousandsofskilledworkers.

Whileitisadauntingtask,Norwaycantakecomfortin

knowingithasdoneitbefore.Despiteinitialinexperience

inoffshoreoilandgasdevelopment,Norwayleverageditsrobustmaritimeheritageinthe1970stosuccessfullybuilditsownoilandgasindustry.Theindustrydevelopedata

rapidpace,withannualproductionscalingbymorethanfivetimesbetween1975and1980andtwentytimesoverthe25-yearperiodfrom1975to2000accordingtothe

NorwegianPetroleumDirectorate.

Nowisthetimetoinvestinasimilarindustrialshift.Withtheexperienceandinfrastructureinplace,Norwayisevenbetterpositionedforsuccessnowthanduringtheonsetoftheoilandgasindustryinthe1970s.

Assembly-lineoffshorewindfactories

Offshorewindisabusinesswheremass-produced,stan-

dardizedturbinesandfoundationsarecoretosuccess.

Similartotheautoindustry’sefficientassembly-linepro-duction,offshorewindcanbenefitfromanapproachthatachievesthenecessarymanufacturingpaceandcostre-

ductions.Norway’sgeographyisidealtodrivethistransfor-mativeshiftbyestablishingthefirstoffshorewindfactoriesinitsfjords.

Anoffshorewindfactorytakesanassembly-lineapproachspanningfromfoundationconstructiontoturbineassem-bly(seeExhibit4).Byparallelization,streamlining,and

allocatingspecialiststospecifictasksateachstation,theassembly-lineapproachsignificantlyenhancesefficiencyandacceleratesthelearningcurve.

Foundations:10–15foundationmanufacturingsitesare

requiredtoproduceanaverageof15–20foundationsperweekin2040.Whethermadefromsteelorconcrete,thefoundationsareequivalentinsizetomulti-storybuildingsandrequiredeep-waterquaysincalmwatersforconstruc-tion.Thefoundationcomponentsareputtogetherorcastfirstonland,thenquayside.Localsourcesoflimestoneforconcretefoundationscanreducetheenvironmentalim-

pactandcostoftransportation.

Turbines:TherearenowindturbinefactoriesinNorway

today.However,withanannualdemandof800turbinesfrom2040onward,thereisacompellingcaseforturbinemanufacturerstoestablishlocalturbinefactories.Local

productionwillreducetransportationchallengesforlargecomponentsandthecarbonfootprint,whilealsoincreas-ingtheresilienceofthesupplychain.Tokeepcostsdownandlearningrateshigh,theturbinesshould,totheextentpossible,bestandardizedintermsoftypeandsizeacrossprojects.

Assemblyprocess:Foundationsprogressthroughthefactoryforinstallationofthetower,nacelle,andblades,avoidingtheneedforexpensiveheavy-liftingatseaneededfor

bottom-fixedwind.Assembledturbinesrequirestorageuntiltheweatherpermitsoffshoretowingandinstalla-tion—alsohere,thefjordsnaturallyofferthetemporarydeep-waterstoragespaceneeded.

Offshoreinstallation:Installationwillinvolvetheoperationof60–80vessels(tugboats,anchorhandlers,subseasup-portvessels,cablelayers,etc.).Duringsuitableweather

windows,vesselswilloperatealldaylongtolaycables,

installmooring,connecttheturbinesandelectricalcables,etc.Repurposingofexistingvesselsandleveragingthe

strongmaritimeexperienceaswellasNorwegianinnova-tionsinlow-carbonshippingarekeyinthispartofthe

valuechain.

Exhibit3|Reaching300GWoffshorewindby2050requiresanefficientfactorycapableofproducing~800turbinesperyear

Annualinstallation(GW)Cumulative(GW)

~800turbines

installedeveryyear

20

15

10

5

0

300

200

100

0

35-40turbines

installedeveryweekinseason

60-80vessels

inoperation

forinstallation

10-15productionsiteswithcapacityof50-80foundationsp.a.

‘50

‘30‘40

Cumulative(GW)

AnnualinstallationFloating(GW)

AnnualinstallationBottom-fixed(GW)

Source:BCGanalysis

NORWAY’S300GWOFFSHOREWINDOPPORTUNITYBOSTONCONSULTINGGROUP13

Fit-for-purposeoff-andonshoregridsandalternativeofftake

300GWofoffshorewindrepresentsatenfoldincreaseinNorway’selectricitygeneration.Thiswillrequireextensiveinvestmentsinthegridinfrastructureonshoreandoff-

shore.Multiplenewexportcablesareneededandthetransmissionsystemonshoreneedstobestrengthenedsignificantly.

Buildingandoperatingtheoffshoregridisamassiveun-

dertaking.ToensureoptimizationfortheentireNorwegianoffshorewindportfolioandNorwayasawhole,theNorwe-gianoffshoregridcouldbedeveloped,owned,andoperat-edbythestatethroughasimilarvehicletoGassco.

Furthermore,alternativeofftakeandexportroutesare

needed.Hydrogenandammoniawillbeimportantenergycarriersinthefuture,andproductionofthesecanserveasalternativeofftakestogridexport—forexample,intimesoflowelectricitydemandorfordirectindustrialpurposes.A

regulatoryframeworkforproductionandexportofthesecarriersneedstobeestablishedandconsideredwhen

designingtheoff-andonshoregrid.

Risksrelatedtooffshorewindandhowtomitigate

Asafront-runner,Norwayshouldensurecollaborationandknowledgesharingtoavoidbearingthecostoftechnologydevelopmentalone.Norwaymustalsobeawareofthe

inherentrisksanduncertaintiesrelatedtobuildinganewindustry:

Regulatoryambiguity:Vaguedirectives,slowprocesses,andunpredictableregulatoryandtaxpolicieswillleadtodelaysandreduceinvestmentappetite.Recentevents,suchas

thepostponedapplicationdeadlinesforUtsiraNordand

SørligeNordsjøII,theabsenceofContractforDifference

regulationsinthesameauctions,andthesuddenimposi-tionofaresourcerenttaxwithretroactiveeffectsonon-

shorewindaregoodexamplesofwhatshouldbeavoided.Thefirstauctionroundwillhelpbuildoffshorewindexperi-enceamongtheauthorities,andweexpectimprovementsinthisareagoingforward.

Lowpowerprices:Powerpricepredictionscarryinherent

uncertainty.Therearedivergingviewsintheindustrycur-rently,withsomebelievinginabundantpowerproduction

Exhibit4|Theassembly-linefloatingwindfactoryincreasesspeedandlowerscostofoffshorewind

NORWAY’S300GWOFFSHOREWINDOPPORTUNITY

andlowerpricesandothersseeingapan-Europeanscarci-tyofgreenpowerandconsistentlyhigherpricesasaresult.EmergingtechnologieswithsignificantlylowerLCOEmay

leadtosubstantiallylowerpowerprices.Developersneedtomitigatethepowerpriceriskintheirbusinesscases,

lookingforopportunitiestosecureofftakeandincr