Is Floating Wind the Nordics’ Next Great Industry?

COP28 called for tripling renewable energy capacity by 2030. While the Nordics are frontrunners in sustainable energy, much progress remains needed in areas like hydropower, solar, and—especially—wind power. BCG Managing Director and Partner Robert Hjorth explains how the Nordics can meet and exceed the target—and reap economic benefits—by making bold investments and commitments today.

For the Nordic countries, the investment required to reach a net zero society is enormous. Success will require multi-GW development of renewable energy sources, significant investments in the power (and hydrogen) grid, policies, market frameworks, and subsidies to support development. At the same time, the transition presents an opportunity beyond the primary goal of making our planet more livable, namely to further expand the export of electricity, end products such as hydrogen, sustainable fuels, green steel, and technology, components, and know-how.

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Norway’s 300 GW Offshore Wind Opportunity

Norway is facing a unique opportunity that could equal its oil and gas industry, providing jobs and national income. Through acting now and ensuring scale, Norway can remain a vital partner for Europe, providing secure and clean energy.

The pathway towards this goal—and the potential challenges—vary among the Nordic countries. Finland, Sweden, and Denmark will be flooded with renewable electricity from wind and solar, so a prominent challenge will be balancing the grid and establishing alternative uses for power when production is high and prices are low. On the other hand, Norway’s situation is different. Hydropower has historically provided abundant baseload power and flexibility to balance the system; however, Norway is now looking at a decade with a power deficit and a significant need for new renewable energy just to meet its own needs.

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About Robert Hjorth

What is floating wind?

The volatility factor in energy pricing

About Robert Hjorth

Robert Hjorth is a Managing Director and Partner at BCG and leads our climate and sustainability work in Norway and our Competence Center in Offshore Wind. Offshore wind is a central component of his vision, with a clear business case for the Nordic countries.

What is floating wind?

Most offshore wind turbines are bottom-fixed—meaning they are tethered to the sea floor. This restricts where they can be built and limits how much they can contribute to renewable energy. Floating wind turbines, because they are not attached to the seafloor, can be positioned in a much wider area, avoiding many of the challenges faced by bottom-fixed turbines. Both technologies will be needed on a large scale, with floating wind holding the largest potential globally due to the availability of areas at larger water depths.

The volatility factor in energy pricing

Power price volatility is increasing as a result of more variable power production. This will continue, but timely action can limit the consequences. For industries that consume power day and night, the volatility is less of a problem as long as the average power price remains stable. For other industries, it could be an incredible challenge, particularly if they cannot adjust their production during high-price hours. This could lead to shutdowns in some sectors.

Is Floating Wind the Answer?

It will take a combination of renewable technologies to supply the energy needs of the Nordics and Europe. We expect electricity consumption in each country in the region to double or triple by 2040. Hydropower, solar, and nuclear power will all play a part where feasible. But wind will have perhaps the most significant role. According to our analysis, Europe will need to reach 2000 GWs of wind capacity required to satisfy Europe’s net zero commitment by 2050—however, at the moment, the combination of installed and projected capacity is at roughly 650 GW. Investments in onshore and bottom-fixed wind capacity will not be nearly enough to close this gap.

This is where floating wind enters the picture. This technology holds many of the answers we need. It also gives the Nordics—and Norway in particular—a one-time opportunity to build a world-leading position in this emerging technology.

Who Will Lead in Floating Wind Power?

Denmark already leads in offshore wind, and the potential in Sweden and Finland is also large within bottom-fixed offshore wind due to lower water depths. Norway is a special case: with one of the longest coastlines in the world, deeper waters, abundant winds, well-established supplier industry, offshore and maritime capabilities, and sufficient funding available, all the pieces are in place to build a global floating wind powerhouse. Norway even has the perfect geographic environment for constructing floating wind turbines: its fjords provide deep-water quays, calm waters, and ample storage. What is required is a significant upfront commitment. Otherwise, the risk is that capital will flow elsewhere, and value chains will be established in other regions. The time is now.

If we do it right, the Nordics can take a leading role in the technologies and industries needed to decarbonize the world. This can almost be thought of as an obligation in the Nordics, not only because we are frontrunners in the green transition but because it is the right thing to do from a socioeconomic point of view. It will take a massive buildout of renewables and substantial investments in the grid infrastructure, but the potential rewards are worth this outlay.