The Norwegian government proposed on Monday to offer up to 35 billion Norwegian crowns ($3.29 billion) in subsidies in the country’s first commercial floating wind power tender, in line with a preliminary plan outlined in June

“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 as inflation hit turbine makers and other suppliers, leading developers to seek significant government support.

Norway’s 2025 budget proposal on Monday kept the subsidy offer unchanged from a mid-term agreement reached in June, despite some expectations from industry it could be increased.

The government said the current calculations are based on a reference project of around 500 MW megawatt (MW) in size, the government said.

ts budget document said how much offshore wind capacity will be realised within the financial framework will depend on factors including further cost developments, project maturity and the bidding companies’ return requirement.

At least 13 consortia and individual bidders have expressed an interest in the tender, which initially focuses on Utsira Nord off the coast of southern Norway near Haugesund, which is divided into three sites with a combined capacity of up to 2.25 gigawatts (GW).

In a consultation on the planned subsidy scheme that closed on Sept. 6, most of the respondents said the underlying future power prices and cost assumptions used by the government for the fledgling technology were unrealistic.

Government estimates pegged the need for subsidies at up to 1.42 crowns/kWh, but several consortia said an award last month for a floating offshore wind farm in Britain, equivalent to 2.7 crowns per kilowatt hours (kWh), offered a helpful benchmark for projects elsewhere.