Will floating challenges hit Portugal and Spain?

• Floating pioneer Equinor delays 1GW project for commercial reasons
• Floating makes up 92.5% of offshore potential in Portugal and Spain
• Portugal is planning a debut 1GW offshore tender by the end of 2023

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Norwegian oil giant Equinor last week put its planned 1GW Trollvind floating offshore wind project on hold. The ripples of this decision could be felt elsewhere in Europe.

Equinor said it could no longer deliver Trollvind in Norway by 2030 as it had planned due to “technology availability, rising cost and a strained timetable”. It said the project was now only commercially viable with government financial support; and said a shortage of its preferred technology solution had undermined its plan too.

But this isn’t just about Trollvind. It will be disappointing for Equinor that it cannot move ahead with the project after the time and money it has invested so far, but the firm can at least use the knowledge for future floating wind projects it is planning in the Nordics.

However, the really interesting point is what this says about floating wind elsewhere in Europe. Equinor was a pioneer in floating wind when it commissioned the world’s first floating offshore wind farm, the 30MW Hywind Scotland, in 2017. If it is now warning about the impacts of inflation and supply chain shortages, the industry should listen.

Countries including Portugal and Spain are looking to use floating wind to unlock the renewable energy potential in their waters. In this article, we will look at the latest on their plans, and how concerned they should be about the troubles at Trollvind.

Portugal: First auction due this year

The Global Wind Energy Council has reported that Portugal has 131GW offshore wind potential, of which 117GW (89%) needs to be floating due to the depth of the seabed off the country’s Atlantic coast. The Portuguese government has spent the last year increasing its 2030 goals to take advantage – and delaying planned tenders.

Portugal originally planned to hold a tender for 3GW-4GW of offshore wind projects in 2022, but it delayed this in June 2022 when it announced that it would instead hold a tender for 6GW-8GW in 2023. It repeated this trick three months later: in September 2022, it revealed it would hold a tender in 2023 for an increased target of 10GW, which is due to be commissioned by 2030. That 10GW tender was due by the end of this year.

However, there was a further change this week when energy secretary Ana Fontoura said on Tuesday (30th May) that around 1GW would be tendered this year, with the rest of the 10GW to come in tender rounds in future years.

There are pros and cons to the country’s increased ambitions.

The big positive is that raising the target has attracted broad interest from developers and investors. In the last year, we have seen plans for a 2GW floating project by Copenhagen Infrastructure Partners; a 990MW project by IberBlueWind; and a 600MW scheme by BayWa. This week, Corio Generation and Portuguese developer Hyperion announced they had formed a joint venture to pursue floating projects in Portugal.

But getting to 10GW installed offshore wind by 2030 is a challenge, and places a lot of emphasis on the country to run multiple tenders in a short space of time. This is a challenge in a country with only 25MW of installed offshore wind. Portugal can certainly learn lessons on how to run an offshore wind tender from other countries, but even the smartest policymakers tend to refine their tender processes if they discover their own unique problems in the first round. We need to see Portugal's timetable for tenders, but there is a risk if it cannot make changes to the process due to tight turnaround times between tenders.

In addition, trying to bring forward 10GW of projects in quick succession from a standing start may exacerbate the issues Equinor is seeing at Trollvind. Competition for technology will be fierce and could raise costs for developers on top of existing inflation. It is also unlikely to give manufacturers confidence that there will be a long-term order pipeline when they are making investment decisions about building factory capacity.

Yet Portugal has a strong interest in making offshore wind work. It has less land than its nearest neighbour Spain, and so needs to use floating wind technology to unlock the potential of renewables in its waters. There are risks in its approach, but this could be one of the most important offshore wind tenders in Europe in 2023.

Spain: Progress slow despite interest

Spain has set out plans for its first offshore wind areas, but has shown less urgency than Portugal in pursuing offshore wind due to its large amounts of onshore solar and wind. If it is to grow its offshore wind sector then it will also be heavily reliant on floating technology: GWEC reported that Spain has 219GW of offshore wind potential, of which 207GW (94.5%) is floating.

In February, Spain’s Council of Ministers passed a decree to allow for development of offshore wind farms in 5,000 square kilometres of its waters. This is split between five zones: North Atlantic; South Atlantic; Strait and Alboran; Levantine-Balearic; and the Canary Islands. This followed five years of negotiations, so progress is leisurely.

Spain’s target of 3GW installed offshore wind in its waters by 2030 is also rather more conservative than Portugal, but more realistic too. 

There is undoubtedly commercial interest if Spain can commit to its first tender. RWE and Ferrovial teamed up in February to co-develop floating wind projects off Spain; Equinor and Naturgy formed a consortium last year to do likewise; and last week BW Ideol teamed up with Elawan Energy to pursue floating projects in Portugal and Spain. The country also has a history in turbine production, which may help alleviate supply chain issues.

But companies need more commitment and clarity from Spain’s government before they can dive in. At this rate, even 3GW by 2030 must be in doubt.