The debate entry expresses the writer’s opinions.
Offshore wind development in Norway is facing a turbulent time.
The price of developing offshore wind has increased by 40 percent in a few years: Raw materials, labor and the parts needed to build have become more expensive.
The same applies to investment capital and loans. Projects that seemed lucrative and profitable a short time ago are risky and unprofitable now.
The crisis in offshore wind was brutally underlined in the UK in August, when no – zero – companies chose to apply for the state’s offshore wind tender.
Just before the deadline expires in Norway, even the government is beginning to doubt its own investment.
Click here to subscribe to the newsletter from Norsk debatt
The competition to build offshore wind has driven prices down in the past.
But the competition also creates bottlenecks in production: There is a shortage of parts for the wind turbines, and the ships that will assemble them.
European companies were leaders in the development of offshore wind, but now face competition from China, which has become the largest developer of offshore wind and also produces most of the parts used in offshore wind in the rest of the world.
also read
Strong reactions to proposals to restrict access to offshore wind matters
Avoid straws in the treasury
In the midst of this global chaos, it seems that the government would rather postpone offshore wind than use more suitable tools.
The government’s strategy has been to support the development of offshore wind with subsidies, so-called “differential contracts”.
It provides some predictability for the companies, but does not remove all the risk that characterizes the market now. The community risks paying for offshore wind both in the form of subsidies and over the electricity bill.
A new offshore wind industry needs support, but cannot get a straw into the treasury.
also read
The ambitions for offshore wind are thinly researched and devoid of realism
Fortunately, there is an alternative solution: state ownership.
Both the power sector and the oil industry are built up with state investment and ownership.
We have, for example, Statkraft, Statnett and Statoil, now Equinor.
The government has announced a competition for commercial companies to build offshore wind. But if the companies do not submit tenders that benefit the community, there is no reason to delay the investment, as Energy Minister Terje Aasland suggests.
Let the state go!
Great social benefit, critical infrastructure, large capital requirements and high risk are factors that speak for government initiative and investment.
The advantages are many:
Government risk-averse investment capital can help ensure that the political ambitions are implemented in practice if commercial actors do not want to. By entering the ownership side, the state gains ownership of new technology and expertise in a future export industry. Ownership gives the projects legitimacy and the community income when the projects are in operation.
The government already has the tools it needs to ensure the development of offshore wind.
The state already owns Statkraft, and the majority of the shares in Equinor.
Both want and can expand the announced offshore wind concessions. But with the current mandate, both companies will have to emphasize profitability over long-term social benefit.
Equinor can, and should, get another social mandate with a long-term objective of building new green industry. Alternatively, Statkraft can take on a more prominent role as a developer and producer, if Statkraft’s commercial partners consider the concessions unprofitable.
also read
– Norway’s population is becoming more and more ready for nuclear power
Petoro as co-owner
There is also a final and more immediate means of action: the government can make state-owned Petoro a co-owner of the concessions, as Petoro is currently a co-owner of 36 oil licenses on the Norwegian continental shelf.
Through Petoro, the State can enter with risky investment capital, and reap the income when the fields produce. Today, Petoro is an important and uncontroversial co-owner on the Norwegian continental shelf, a solution that could work just as well for offshore wind.
Participate in the debate
Do you have an opinion on this matter or something else? Submit a debate post here.
All posts are read and evaluated. Expected response time is 1-2 days.
Remember to attach a portrait photo with photo credit, name and title and links to research and articles you refer to.
Kind regards, the debate editorial team at Nettavisen.
The government’s investment in offshore wind risks running aground in a short time, because the current expensive subsidy solution is not enough to mitigate the risk for commercial developers.
The government should instead investigate how the state can step in as an owner and co-owner of offshore wind, to avoid it stumbling at the first slight uphill.
Without offshore wind, we will not get the green industrial boost that the government has promised – and which Norway badly needs.
2023-10-28 20:27:37
#State #ownership #save #offshore #wind
