Oil major Shell joins hunt for Norwegian offshore wind

Oil major Shell has signed an agreement with hydropower utilities BKK and Lyse to prepare applications for offshore wind projects in the two areas of Sørlige Nordsjø II and Utsira Nord, which the Norwegian government earmarked for development last year.

Norway is to hold allocation rounds in the near future for the two areas, both located in the southern part of the Norwegian North Sea. 

“We are establishing an industrial partnership with ambitions to play a key role in the shift to cleaner energy,” said Marianne J. Olsnes, managing director of Norske Shell.

“Together we bring the best of global and local expertise into a joint project. We aim to be a compelling applicant for the offshore licenses,” she added.

“Both fields are challenging with regards to technology and development solutions,” the companies said in a statement, with Sørlige Nordsjø II pushing the limits of fixed-bottom solutions, and Utsira Nord demanding innovation in floating technology.

The partners see Sørlige Nordsjø II – located off the south-west of Norway, close to the border of Danish waters – as ideal for a connection to continental Europe.

“We see Norway as interesting both in the perspective of supplying enough renewable energy to Europe and to develop floating offshore wind solutions that can become commercially viable,” said Hessel de Jong, Shell general manager for offshore wind in Europe.

As utility companies, BKK and Lyse have deep expertise in renewable energy production, development of complex infrastructure and energy trading.

“The two forms of renewable power — wind and hydro — complement each other perfectly,” said BKK chief executive Jannicke Hilland. When the wind blows and energy is generated, water is held back in reservoirs for release during calm periods. 

“We wish to contribute to the electrification of the oil and gas industry, and connect the offshore wind potential of the Southern North Sea to relevant markets in Europe. The interaction between offshore wind and hydropower will be an advantage for us,” Hilland added.

“We have not pre-selected any technologies or suppliers. The global market for offshore wind is growing rapidly and we aim to be a platform where Norwegian suppliers can develop competitive advantages to succeed in international tenders,” said Eimund Nygaard, Lyse chief executive.

The trio is likely to face stiff competition in Norway, as several bidding consortiums have set their sights on Sørlige Nordsjø II and Utsira Nord.

For Sørlige Nordsjø II, one such group comprises BP, Statkraft and Aker Offshore Wind, another is made up of Equinor, RWE Renewables and Hydro REIN, another consists of Statkraft, Aker Offshore Wind and Aker Horizons, and a fourth comprises Ørsted, Hafslund Eco and Fred Olsen Renewables.

Meanwhile, a trio of Ørsted, Hafslund Eco and Fred Olsen Renewables, Equinor and Vårgrønn – a joint venture of energy companies Eni and HitecVision – and a joint venture formed by Norwegian renewables developer Magnora and UK engineering firm TechnipFMC have all announced their intention to bid for projects in Utsira Nord.