Norwegian and Scottish ports in the offshore wind farm business

By Marek Grzybowski

In Norway, the topic of installation ports has been overlooked. There is concern among Norwegian port authorities about their role in the Norwegian government’s strategy related to the development of wind farms. The authorities do not know the timetable for the inclusion of further offshore installations resulting from tenders for further investments related to the development of Norwegian offshore wind energy. An active domestic market is necessary to strengthen Norwegian players, warns Menon Economics in a report published on November 4 this year.

This timeline is crucial for the ports to establish an investment strategy and build the capacity of the installation terminals, warn Knut Arild Hareide and Arvid Nesse in Kystens Næringsliv, pointing out that “we will not succeed in realizing the government’s ambitions for offshore wind energy if we do not secure solid investments in port infrastructure.” In Norway, the topic of ports has been surprisingly overlooked. There is currently a lot of frustration among Norwegian ports due to the lack of predictability in the future, Hareide and Nesse note. This is due to the lack of a binding timeline for the next stages of launching offshore wind farms in Norwegian territorial waters and the Norwegian economic zone.

 

The port authorities are not aware of the transmission capacities launched “in individual tender rounds for offshore wind energy”. This schedule is essential for the ports to establish an investment strategy and build capacity,” reports “Kystens Næringsliv”.

It is emphasized that ports are in many ways important and natural elements of the supply chains for offshore wind energy. In Norway, ports have significant assets to support the offshore wind industry. Seaports on the Norwegian coast have deep water quays, extensive hinterland with large areas to develop. Most importantly, they have “a lot of experience in servicing both planned Norwegian offshore wind farms and projects in neighbouring countries,” emphasize Hareide and Nesse. They point out that Norway has strong local content, because “with the tasks that ports can receive, strong local suppliers of goods and services emerge”.

The development of installation terminals can increase the ports’ share in generating additional revenues for the national budget. This has already been shown in 2023. The Menon Economics report contains specific calculations, and it results from them that Norwegian ports investing in offshore wind energy facilities can generate NOK 8.4 billion for the state budget. This result can be achieved if 350 offshore wind turbines are installed in ports annually.

The recently updated report by Menon Economics experts includes an assessment of the development of the offshore wind market, as well as long-term revenue forecasts for the Norwegian fixed and floating offshore wind farm industry.

Offshore wind energy needs seaports with infrastructure

The report is an update of Menon’s 2022 floating offshore wind analysis, but also includes analyses of the fixed offshore wind market. The analysis is being carried out on behalf of Norwegian Offshore Wind, Offshore Norge, Innovation Norway and Export Finance Norway, the experts inform in a release published on November 4 this year.

The report emphasizes that the development of offshore wind energy will have a significant impact on Norway’s economy. “Based on Menon’s economic impact model, we conclude that the Norwegian industry associated with floating offshore wind energy could maintain between 7,000 and 36,000 jobs in 2050.” Norwegian analysts calculate, pointing out that this will depend on market development and the competitiveness of the Norwegian industry.

According to the calculations updated in 2024, the offshore wind energy industry could, with intensive development, “provide a contribution to GDP of NOK 15 billion to NOK 78 billion in 2050.” According to calculations by Norwegian experts, the dynamic development of offshore wind energy in Norway could generate demand for employment of 6,600 to 25,100 employees.

Depending on the dynamics of industry development and local content, “the inflows to GDP could reach NOK 14 billion to NOK 54 billion in 2050. The analysts reserve that the presented estimates are gross numbers, while the net effect will depend on the alternative use of resources, including labor and capital.”

Menon Economics also notes that “the revenue potential of Norwegian players in the offshore wind sector depends on the size of the market, as well as the competitiveness of the Norwegian industry.” The analysis also shows that competitiveness will have a greater impact on revenue potential than market size.

To strengthen Norway’s competitive advantage, Menon Economics believes that the following factors are important and decisive:

• An active domestic market is essential, strengthening Norwegian players in both markets [floating and fixed installations – MG], but the impact will be greater in the current phase of commercialization of floating offshore wind.
• Strengthened international engagement of the Norwegian offshore wind industry, with established players at the forefront.
• Accelerated technology development, focusing on standardization, robotization and automation.
• Ensuring sufficient production capacity around established technology concepts, especially in port services, as well as assembly and installation.
• Transfer of resources and capitalization of existing know-how, supported by the willingness of Norwegian industry to adapt.

To this set of tasks must be added rapid increases in large-scale investments in Norwegian ports. Hareide and Nesse note that “port strategies are being developed in neighbouring markets in parallel with political processes concerning tenders and auctions for offshore wind energy.”

 

 

Source: offshorewindscotland.org.uk

SIM – £500m for port and offshore wind synergies

The UK is cited as an example, which is “looking to the future of offshore wind, with port development central to the plan to move forward. It is noted that since 2022, Scottish offshore wind developers have been working with the Scottish Government on a dedicated Strategic Investment Model (SIM). Working across industry and public sectors, developers, ports and government have pooled their efforts, potential investment and shared the risk of developing the necessary infrastructure.

In January 2024, the Scottish Government reported that “projects worth around £500m are nearing completion”. “A strategic investment to help unlock Scotland’s green energy revolution is one step closer,” Scottish First Minister Humza Yousaf announced in January.

The Strategic Investment Model (SIM) delivers a comprehensive mix of local and inward investment in ports, port infrastructure and manufacturing, with a total investment of around £500m.

The Scottish Government has highlighted that SIM will help deliver transformational growth for Scotland’s offshore wind supply chain through innovative collaboration between offshore wind developers, the Scottish Government, enterprise agencies and Crown Estate Scotland.

Speaking at the Scottish Renewables and Offshore Wind conference in Glasgow, First Minister Humza Yousaf said: “There are times when some industries can look to the future and see a future where they will play a key role in securing the nation’s wealth and prosperity – Scotland’s offshore industry is at that moment. Together we can create the right conditions to attract investment, build the supply chain, recruit and deliver the infrastructure needed to ensure these projects thrive.”

Norwegian ports with barriers

During research conducted over two years ago, 14 Norwegian ports included in the analysis were asked about the main barriers that hindered them from participating in the development of offshore wind energy. Menon Economics synthetically states that the challenge emphasized by port authorities is financing, as well as access to sufficient land for expansion. Several authorities also indicate that the pace of development of offshore wind energy remains unpredictable.

– This shows that we need to expand the port in Norway, and the government must present a committed plan for the development of Norwegian ports and bases – emphasized Arvid Nesse, CEO of Norwegian Offshore Wind, in a statement for Arne Vatnøy.

In the pages of “Kystens Næringsliv” it is stated that in Norway this topic has unfortunately been surprisingly overlooked. There is currently a lot of frustration among Norwegian ports due to the lack of predictability.