Norway faces a paradox. The Nordic country has one of the world’s richest offshore wind resources, with gusts rushing along its rugged coast at speeds averaging 10 metres per second. But with commercial and residential power demand largely met by electricity flowing from its vast hydropower network — and ever-cheaper onshore wind — so far only one turbine has been installed in its waters — the 2.3MW Hywind floating wind prototype, switched on in 2009.

However, four projects now heading for installation could be key to changing offshore wind’s fortunes in Norway. The 88MW floating Hywind Tampen array, the 350MW bottom-fixed Havsul 1 and the 3.6MW floating TetraSpar and 1MW SeaTwirl prototypes together have the potential to prove the economic viability of Norway’s seaborne winds as a decarbonising power source — in the first instance, for offshore oil & gas platforms. But the greater prize may well be new international export markets for the Norwegian oil & gas supply chain.

The highest-profile of the four projects, Norwegian energy giant Equinor’s Hywind Tampen, will be a flagship in more than one sense. The first-of-a-kind project — 11 spar-based wind turbines providing 35% of the Gullfaks and Snorre oil fields’ electricity — will be a maiden outing for the developer’s strategy of “greater interaction of renewables, low carbon and the oil & gas business”, as Equinor’s senior vice-president for wind and low-carbon solutions, Stephen Bull, tells Recharge.

“The Hywind story is a good story in itself... but [Hywind Tampen] is an indicator of how hard the oil & gas guys are looking at this — bringing offshore wind in as an alternative to power from gas turbines or a cable from shore. There is tremendous opportunity for [Equinor] here,” says Bull.

Decarbonising the production of offshore oil & gas off Norway while the country is still pumping out 1.5 million barrels of crude a day is arguably a tokenistic effort. But with the Norwegian government aiming at carbon neutrality by 2030 — and with 23% of the country’s still-rising emissions coming from electricity-generating gas turbines used by the oil industry — there is intense pressure on Oslo to act.

The simplest way to reduce offshore oil & gas emissions in the short term would be to tap Norway’s hydropower resource via long-distance, grid-linked power cables. But the country’s offshore oil & gas supply chain is starting to embrace a longer-range view by investing in floating wind now in the hope of shaping a new industry and future-proofing revenue streams for when oil demand falls.

A growing number of Norwegian oil patch players, including Equinor and contractors Aker Solutions and ABB are of the belief that floating wind “will be able to compete with hydropower prices at landfall in the future”, notes Tor-Eivind Moen, ABB’s vice-president of new energy market development.

Moen, who led a recent study with environmental lobbyist Zero into accelerating Norway’s adoption of offshore wind, underlines that “avoiding shore-to-offshore [platform] cabling costs with floating wind connected directly to oil & gas platforms would certainly be beneficial to making it more quickly cost-competitive [with hydropower], as would combining power-from-shore and offshore wind in a complementary way”.

The ABB/Zero study concluded that installing 1GW of floating wind to power late-life output from Norway’s ageing offshore fields would both hone the economics of the technology and help meet the country’s emissions targets. Einar Wilhelmsen, head of energy systems at Zero, describes this as getting “pose og sekke” — “bags and sacks”, the Norwegian equivalent of “having your cake and eating it too”.

“Subsidising offshore wind and bringing it to Norway makes very little sense given the price of onshore wind now and our existing hydropower supply. To accelerate commercialisation of [market-competitive] floating wind, you need scale — and Norway has this, we think around 1GW to begin, linked to our offshore oil & gas platforms, [to meet] roughly one-third of [their power] demand,” he says.

From this start, according to ABB/Zero projections, a second gigawatt of offshore wind could be added using the electrical infrastructure installed in phase one, and a third gigawatt built out later, with any surplus power not consumed by the offshore platforms flowing onto the onshore grid and on into Europe, driven by the improved economics of a by-then mature regional supply chain. This offshore-to-shore cabling could also feed back-up hydropower to offshore production platforms in periods of low wind.

“There are tremendous possibilities here — industrial, social, environmental,” says Moen. “Yes, we have enough power for ourselves through our hydro [but] to reduce emissions we need to think long-term about our life beyond oil & gas,” he says, pointing to the need to reinvent many of its 1,100 sector supply chain companies — which, in 2017, had a combined turnover of NKr340bn ($40bn).

“Things are moving very quickly [in offshore wind]. Costs have dropped very dramatically, and a specialist supply chain is developing; and in floating wind you have France, Japan and others getting organised to industrialise,” explains Moen. “Norway must not miss this double opportunity.”

Floating wind holds a particular appeal for Norway and its oil & gas industry as its continental shelf drops away precipitously off its coastline, meaning industrial experience gleaned over decades offshore gives its supply chain an almost unique skillset for deepwater engineering.

And this holds true globally too, as the nascent sector gears up for commercialisation beyond the three- and four-unit arrays moving ahead off Europe, to first utility-scale projects off Asia and the US.

“The market fundamentals for floating wind are there not just for pilots and arrays now but for the creation of a healthy, truly international industry,” says Astrid Onsum, head of offshore at Aker Solutions, which has over 50 years of experience devising technologies for the international offshore oil & gas sector.

“We are taking skills that were developed in oil & gas through a very diverse range of projects around the globe and applying them [to floating wind technology],” she notes. “The perspective, knowledge and technology we feel will help move the industry forward faster by driving down capex [capital expenditure] but also opex [operating expenditure], which is a big part of the total cost of offshore projects.”

Aker Solutions nailed its colours to the mast last February when it took a stake in US floating wind pioneer Principle Power, which is sitting on a 9GW pipeline of orders. The contractor’s compatriot Kvaerner followed suit with a collaboration deal with French floating wind technology company Ideol a few weeks after.

These two deals are indicative of an inflection point that the industry has been waiting on “for a while”, notes Andy Stowbridge, associate director of UK consultancy BVG.

“Exporting the extensive skills and IP [intellectual property] of Norway’s offshore industry, built up over many years in the North Sea, is the real opportunity... and would support transition into a new growth area,” he says.

“A predictable domestic market for floating wind, with high-profile demonstration projects providing the confidence for investment in this emerging market, the IP, skills, experience and expected cost reductions would then create additional export opportunities.”

Bloomberg New Energy Finance senior analyst Tom Harries adds: “Norway is unlikely to support commercial-scale offshore wind projects because onshore wind cheaper to harness to meet decarbonisation targets. But [offshore wind makes sense in] an industrial strategy where hosting demonstration projects advances and proves technology, construction and operational processes on a commercial scale to help national champions export kit and services.”

According to ABB/Zero’s calculations, offshore wind could represent an export market worth NKr50bn ($5.8bn) a year for the Norwegian oil & gas supply chain by 2030.

“Market expectations are increasing, and we are seeing new companies from the oil sector coming into wind as the work levels [in oil & gas operations] drop,” says Jon Dugstad, wind and solar director at Norwegian business development agency Norwep. “Aker Solutions, Kvaerner and [Norwegian engineering contactor] Aibel [which was involved in engineering on Equinor’s history-making 30MW Hywind Scotland floating array] are sending clear signals to the domestic supply chain.”

Development of lead-off floating wind arrays off Norway would not be before time. The government has now loosely cordoned off two zones in the North Sea that energy minister Kjell-Børge Freiberg stated in September “might be relevant for large commercial projects in future” — a sharp change of tack from his predecessor, Terje Søviknes, who had earmarked the acreage solely for pilot projects.

“This shift by government should perhaps be seen in the context of the market in the North Sea [countries] for a more diverse energy system that will have wind, solar, hydrogen, natural gas and hydropower and opening these two areas up is a good starting point for the industrialisation of offshore wind,” says Onsum.

“What we [in the Norwegian supply chain] want is engagement in developments of scale, in the 300-500MW range, which we see becoming more common across the globe and we believe will soon be financially viable in Norway also.”

Persuasive as offshore wind’s cost of energy argument may increasingly be in Norway — and keen as its transitioning offshore oil industry is for virgin markets, the game is not yet won, as Wilhelmsen stresses. “In Norway we have been talking about offshore wind for a very long time, but there have been no policy measures in the Storting [parliament] that were likely to really happen. Hopefully this is now soon to change.

“We have been trying to get the offshore oil & gas industry to reduce their emissions for many years, using power-from-shore. And we know as a country that we have to eventually move beyond oil & gas. Offshore wind is now a mainstream energy and floating wind is sufficiently mature [as a technology that] it should be looked at to do the same [as a cost-competitive energy source] for Norway, here at home but also overseas. It ticks all the boxes.”

Wind

Is Norwegian offshore wind about to take off?