Norway opened for full-scale offshore wind projects

By royal decree, Norway opened the two first areas for offshore renewables. It is now possible to submit license applications for development of full-scale offshore wind power projects in Norway.
Also, regulations clarifying the licensing process were adopted on 12 June 2020.

The areas

According to the Norwegian Ocean Energy Act Section 2-2, the King in Council may decide that an area may be opened for offshore renewable energy production, and on 12 June 2020, by royal decree, the areas Utsira Nord and Sørlige Nordsjø II opened for offshore renewable energy projects.

The press release from the Ministry of Petroleum and Energy («Ministry») includes the following description of the two areas:

  •  «Utsira Nord is located to the west of Haugesund, and is suited for floating wind power, which is the most interesting technology from a Norwegian perspective. The area is also large, 1010 square kilometers, close to shore and provides opportunities for demonstration projects and larger projects. Utsira Nord’s size provides room for adapting to other interests in the licensing process. The ministry proposes to open this area to facilitate the development of such technology.
  •  Sørlige Nordsjø II borders the Danish sector in the North Sea, and is relevant for direct export of electricity. The area is 2591 square kilometers, has depths which makes it possible to develop bottom-fixed wind power here, but floating solutions could also be relevant.»

Combined, the two areas allow for a maximum development of 4,500 MW, whereas 1,500 MW are allocated to Utsira Nord and 3,000 MW are allocated to Sørlige Nordsjø II.

However, it was decided against opening the area Sandskallen-Sørøya Nord located north-west of Hammerfest in northern Norway as the Ministry concluded that this area should not be prioritized at the current time (partly due to opposition from the fishing industry).

«Utsira Nord» and «Sørlige Nordsjø II» will open on 1 January 2021.

The Ocean Energy Regulation

On 12 June 2020 the King in Council also adopted by royal decree the Ocean Energy Act Regulation (the «Ocean Energy Regulation»), which supplements the Ocean Energy Act and clarifies the licensing process. The Ocean Energy Regulation is mainly in line with the proposal sent on hearing in June 2019 and will enter into force 1 January 2020.

According to the Ocean Energy Regulation a party fulfilling the requirements in the Ocean Energy Act may initiate a licensing process by sending a proposal for a project specific impact study program to the Ministry of Petroleum and Energy.  The proposed project specific impact study program is sent on hearing to the relevant authorities and interest groups. The program for the project specific impact study may thereafter be approved by the Ministry based on the proposal and the hearing submissions.

We note that several project specific impact study programs may not be approved for the same area.

Within two years from approval of the project specific impact study program, an application for license for development of the project must be sent to the Ministry. The application shall include the project specific impact study.

The Ministry may thereafter approve the application and grant the applicant a license for development of the offshore renewables project. A license may be granted for a period of up to thirty years from the operation date of the project.

The Ocean Energy Regulation also includes several time limits to ensure progress of the licensee’s development of the project.

Within two years from the date the project license was granted, a detailed plan for the project must be sent to the Norwegian Water Resources and Energy Directorate («NVE»). NVE’s approval of the detailed plan is required before construction of the project may commence.

Furthermore, within a time limit of three years from approval of the detailed plan, the offshore renewable project must be operational (i.e. electricity shall be produced and transmitted from the project area).

Breaches of the time limitations may lead to termination of the project license. However, the Ministry may prolong the time limitations for the application for the license, the detailed plan and/or the operational date of the project for periods of up to two years. However, the Ministry comments that the «practice for prolongation of the time limitations should be strict…»

CLP’s renewables team will follow the development of the Norwegian legal framework for offshore renewables closely.

The Ministry’s press release and the royal decrees are available here (Norwegian version) and here (English version).

Amund Berthelsen Erdal/Partner

Julie Reinfjord/Associate