Five offshore wind auctions coming up in 2023 we are keeping an eye on
This year is set to be one of the busiest for offshore wind developers and governments around the world as a multitude of new sites are scheduled to be awarded for offshore wind farm construction.
From the much longer list of auctions coming up in 2023, each bearing national and/or global significance, Offshore Energy – Offshore Wind is bringing a short overview of five offshore wind tenders and lease sales among the many the industry will be watching closely this year.
Norway’s Ministry of Petroleum and Energy plans to tender Utsira Nord and the first phase of the Southern North Sea II (Sørlige Nordsjø II) offshore wind areas by the end of the first quarter of 2023.
At Southern North Sea II, Norway will award 1.5 GW of offshore wind capacity in the first phase and a further 1.5 GW at a later date in the second phase. At Utsira Nord, a total of 1.5 GW will be awarded in 2023 across three 500 MW sites.
Why it is significant: Home of the world’s largest floating wind farm and the first to power oil and gas platforms, Norway is taking its first big step in offshore wind by opening 4.5 GW of new areas and setting up new permitting process.
The government plans to employ the so-called Anglo-Dutch competitive approach to award seabed at Sørlige Nordsjø II, while the site(s) at Utsira Nord will be awarded based on qualitative criteria, focused on floating wind technology. Furthermore, several big offshore wind and oil and gas players announced they would place bids in Norway, with some of them having plans to potentially include electrification of oil and gas assets.
USA – Gulf of Mexico
In October 2022, the US Bureau of Ocean Energy Management (BOEM) informed that it had designated two Wind Energy Areas (WEAs) in the Gulf of Mexico for offshore wind development.
BOEM is now expected to issue a Proposed Sale Notice (PSN) with a 60-day public comment period in the first few weeks of 2023, with the Final Sale Notice (FSN) and the lease sale date anticipated to be announced in the first quarter of the year.
Why it is significant: Bringing offshore wind capacity to the grid from the Gulf of Mexico, traditionally an oil and gas exploitation area, will mark a strong step forward for energy transition both in the US and on a global level.
The future installed capacity at the two WEAs BOEM designated for building wind farms is estimated to power around 3 million households. One WEA is located approximately 24 nautical miles off the coast of Galveston, Texas, and one is located about 56 nautical miles off the coast of Lake Charles, Louisiana, the first of the Gulf of Mexico states to set an offshore wind target.
In August 2022, Colombian Ministry of Mining and Energy and the General Maritime Directorate (DIMAR) published a resolution that set the country on the path of awarding its first offshore wind permits in 2023.
The permits that will be assigned in the first round, which will be completed in the second half of 2023, will allow the developers to undertake feasibility studies and advance their licensing in order to continue with the maritime concession application process.
Why it is significant: With Colombia’s award of first offshore wind permits, offshore wind will officially kick off in Latin America. Given the government’s plans and the significant interest from developers, the country is poised to add massive offshore wind capacity in a relatively short time.
According to a recent analysis from Wood Mackenzie, Latin America will see a sharp increase in offshore wind projects, with capacity reaching 34 GW by 2050 and Colombia and Brazil leading the way. According to some talks within the industry, Brazil is also looking at launching an offshore wind tender in 2023; however, this information is yet to be confirmed.
Lithuania’s Ministry of Energy is preparing to launch the country’s first offshore wind tender in September 2023. The project is already decided to have an installed capacity of 700 MW and is expected to be operational as early as 2028.
It is estimated that 700 MW of offshore wind capacity in the Baltic Sea could produce up to 2 TWh of green electricity per year, which would ensure up to a quarter of Lithuania’s electricity demand.
Why it is significant: With the completion of its first tender, Lithuania will get its first-ever offshore wind farm. This is also somewhat of a prelude into the country’s tendering procedure for its second offshore wind project, which is now planned to be completed around the same time as the first offshore wind farm.
In November 2022, the government approved amendments to the Renewable Energy and Electricity Laws which define the tender conditions for the development of the second offshore wind farm. Unlike under the first tender, the developer(s) of the second wind farm will build and operate the project without subsidies, and will also pay a development fee and carry out studies and grid connection themselves.
The Irish government recently approved terms and conditions for the country’s first auction to supply electricity from offshore wind under the Renewable Electricity Support Scheme (ORESS 1).
The pre-qualification stage was scheduled to launch in December 2022, while the qualification stage and the auction process are planned to take place in the first half of 2023, with final results expected to be published by June.
Why it is significant: Ireland, which currently has 25 MW of operating offshore wind capacity via its only offshore wind farm (Arklow Bank), plans to procure up to 2.5 GW of capacity under ORESS 1, more than a third of its recently increased target of 7 GW by 2030. The Irish government has spent the past couple of years improving rules and regulation to streamline the permitting process and speed up offshore wind development.
The seven offshore wind projects that have been designated as “Relevant Projects” are eligible for the first auction after being awarded Maritime Area Consents (MACs) in December. These include Oriel Wind Park, Dublin Array (Bray and Kish Banks), Codling Wind Park I and II, Fuinneamh Sceirde Teoranta (Skerd Rocks), and North Irish Sea Array (NISA).