OSLO (Reuters) – Energy giant Shell may withdraw from an ongoing tender for Norway's first commercial offshore wind farm as question marks remain over the project's profitability, the company's country manager said.
Shell, part of a consortium with two local Norwegian power companies, has applied for pre-qualification to build Norway's first bottom-attached offshore wind farm at Sollige Nordsjø II in the North Sea.
But Shell's Norway country manager Marianne Olsnes told an energy conference in Oslo on Wednesday that the business case “doesn't look very good”.
“We may not make a bid,” Olsnes said during a panel discussion.
Although no final decision has been made, the bidding conditions were “very strict”, Olsnes told Reuters on the sidelines of the event.
Energy companies are being asked to develop specific parts of projects normally handled by grid operators, but the power will be delivered to markets with no interest in high-cost power, he said. said.
“But of course, the pre-qualification is not over, so we don't even know if we can participate in the match yet,” she added.
The tender offers an opportunity to build a ground-mounted wind turbine with a capacity of 1.5 gigawatts (GW), which Norway hopes will be the starting point for large-scale offshore power development up to 2040. ing.
Despite offers of subsidies amounting to 23 billion Norwegian crowns ($2.17 billion), industry representatives and lobby groups still question whether this is enough.
The global offshore wind industry is struggling with soaring inflation, rising interest rates and increasing costs in the supply chain.
Mr Olsnes said he did not rule out the possibility that Shell remained interested in the planned floating wind tender or future offshore wind auctions.
($1 = 10.5869 Norwegian Crowns)
(Reporting by Nora Buli; Editing by Terje Solsvik)
