The Norwegian government proposed on Monday to offer up to 35 billion Norwegian crowns ($3.29 billion) in subsidy payments in the country's first commercial floating wind power tender, in line with a compromise reached earlier this year.
"Norway has enormous potential for floating offshore wind on its continental shelf, but because the technology is still immature and expensive, government support is needed to speed up development", energy minister Terje Aasland said.
The expected cost of building floating wind farms has soared compared to earlier forecasts as inflation hit turbine makers and other suppliers, leading developers to seek significant government support.
Norway's subsidy offer remained unchanged from a mid-term budget agreed earlier this year, and the current calculations are based on a reference project of around 500 MW megawatt (MW) in size, the government said.
How much offshore wind capacity will be realized within the financial framework will depend, among other things, on further cost developments, project maturity and the bidding companies' return requirement, the government said in the budget document.
($1 = 10.6472 Norwegian crowns)
(Reuters - Reporting by Nora Buli, editing by Terje Solsvik)