Swedish utility Vattenfall will join the growing list of firms competing for licenses to build offshore wind farms off the coast of Norway, it said on Tuesday.
Vattenfall is partnering with the Seagust joint venture formed by Norwegian investment firms Arendals Fossekompani (AFK) and Ferd in preparing a bid in upcoming tenders.
"We are always looking into the most favorable market and now Norway is increasingly more attractive," Helen Bistroem, who heads Vattenfall's wind business, told Reuters.
With its long coastline and often harsh weather, Norway has great wind resources, which the government is now preparing to harness.
Meanwhile, AFK and Ferd provide the strong local connection Vattenfall was seeking, Bistroem added.
"We truly believe we are a top contender now in this licence," she said.
Norway has announced plans to open two North Sea areas - Soerlige Nordsjoe II and Utsira Nord - for development of up to 4.5 gigawatt (GW) of bottom-fixed and floating offshore wind capacity, which has garnered massive interest from domestic and international investors.
While competition will be strong, Vattenfall has a lot of offshore wind experience, Bistroem added.
The firm already operates 4 GW of wind power, two-thirds of which is offshore, with another 2 GW under construction and 6 GW under planning.
In Norway, offshore wind is seen as a key industry to replace its dominant oil and gas sector in the transition to a cleaner energy future.
However, the tender process has faced a delay recently amid a spike in power prices, rising domestic demand and discussions over whether Norwegian offshore wind farms should be connected to other markets.
"Whatever happens there, offshore wind farms will have a dampening effect on any prices, wherever you start," Bistroem said.
The question of whether Norway will permit exports to other markets via so-called hybrid cables was not in itself a deal-breaker for investment, which depended on the whole package of conditions to be offered, she added.
(Reporting by Nora Buli Editing by Mark Potter)