Proposal for Opening Offshore Areas for Renewable Energy Production
According to § 2-2 of the Offshore Energy Act, offshore renewable energy production requires that the state has opened the area for concession applications. In the consultation document, the Ministry of Petroleum and Energy (Ministry) proposes opening the areas of Utsira Nord and Sandskallen-Sørøya Nord for renewable energy production. Additionally, the Ministry seeks feedback on a potential opening of the Southern North Sea II area.
Utsira Nord is located 22 kilometers west of Utsira in Rogaland and is only suitable for floating wind power. Sandskallen-Sørøya Nord, located northwest of Hammerfest in Finnmark, may be suitable for both bottom-fixed and floating wind power. Southern North Sea II, situated approximately 140 kilometers southeast of Kristiansand, is primarily intended for bottom-fixed technology but with the possibility for floating wind power.
If these areas are opened for renewable energy production, interested parties can apply for a concession according to the rules in the Offshore Energy Act. In the consultation document, the Ministry emphasizes the need for more detailed regulations concerning the concession process and subsequent activities. In this context, the Ministry has drafted a regulation on renewable energy production (the Offshore Energy Regulation).
Proposal for Regulation on Offshore Renewable Energy Production
Scope of the Offshore Energy Act
The Offshore Energy Act initially applies only beyond the baseline, meaning that the current rules regarding concessions, etc., do not apply within the baseline. The Ministry believes there is no reason to differentiate between potential facilities inside or outside the baseline and therefore proposes that the Offshore Energy Act be extended to also apply within the baseline, as allowed by § 1-2 seventh paragraph of the Offshore Energy Act. The purpose is to ensure comprehensive management of all areas that can be used for offshore renewable energy.
Simplified Procedures for Demonstration Projects
The Ministry proposes a specific regulatory provision for the simplified processing of demonstration projects. In this context, a demonstration project refers to a smaller facility for renewable energy production, where the primary purpose is to test new technology, new concepts, etc., rather than energy production itself. The provision suggests that the rules regarding  opening of an AREA, detailed planning, and notification should not apply to demonstration projects.
Clarification of the Concession Process
The proposed regulation clarifies the process for handling concession applications. The regulation proposes that the concession process begins with the project developer submitting a notification with a proposal for a project-specific environmental impact assessment. The notification should include a description of the energy facility, potential development solutions, the project area, and possible effects on other industries, the environment, and society. Additionally, the notification should contain a description of the issues to be assessed, the methods to be used, and information about the applicant’s operations.
The program for the project-specific environmental impact assessment will then be put out for consultation, before the Ministry “may” establish a final assessment program. However, the Ministry is not obligated to approve an assessment program, even if there is nothing wrong with the notification or the assessment program itself. The Ministry may change the area for the project when establishing the assessment program.
If the Ministry establishes the program for a project-specific environmental impact assessment, it applies to a specified part of an opened area (project area). In this context, the Ministry proposes a first-come, first-served principle, which means that it will not be possible to submit a notification for an area where another party has already had a project-specific environmental impact assessment program established. The rationale is that developing a project for offshore renewable energy production is costly, and double processing should therefore be avoided.
After the program for the project-specific environmental impact assessment is established, the project owner has two years to submit a concession application. The project-specific environmental impact assessment must be included with the application.
The Ministry may grant a concession for up to 30 years. If a concession is granted, the project owner must submit a detailed plan within two years. Once the detailed plan is approved, the facility must be constructed within three years.
The Ministry may impose conditions in connection with concession decisions, detailed plans, and other decisions under the regulation.
Processing Fee
The Ministry proposes to introduce a processing fee of NOK 100,000 for handling notifications with proposals for a project-specific environmental impact assessment program. The rationale is twofold. Firstly, it is argued that it is reasonable for the parties involved to cover part of the administrative costs the state incurs in processing any notifications. Secondly, it is emphasized that a processing fee can help eliminate applicants who do not have concrete development plans.
Grid Connection – No Separate System Operator
The Ministry does not propose any changes or adjustments to the current regulations for grid connection. This means that cables directly to foreign countries will require a concession according to § 8-1 of the Offshore Energy Act, and that connecting to the grid in Norway will require a concession under the Energy Act.
The Ministry notes that if potential wind farms are connected to the grid through radials, these will be considered as ordinary connection lines for production. Similarly to a land-based producer, this means that Statnett will be able to set conditions in accordance with the system responsibility at the connection point. The producer must also deal with the local network company where the production is connected. The connection radials to offshore wind farms will primarily have one or a few connections and will thus be defined as customer-specific facilities and are therefore not included in the transmission network. The Ministry therefore believes that there is currently no need to designate a system operator offshore.
Next Steps
The deadline for comments on the regulation and the proposal to open areas is November 1, 2019. After the consultation period has concluded, the Ministry of Petroleum and Energy will present a proposal for a royal decree to open the areas and regulations to the Offshore Energy Act. Hjort will naturally continue to monitor developments further and is ready to assist stakeholders in offshore wind at all stages of the process.
