Amendments to the licensing system for onshore wind farms in Norway

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Published 23 June 2020
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On Friday 19 June 2020 the Ministry of Petroleum and Energy submitted a report to the Parliament regarding amendments to the license process for onshore wind farms in Norway. The report proposes several amendments to the licensing system that will impose stricter requirements for developers of new wind farm projects. On the same day, the Parliament passed a resolution requiring that the Government reviews existing wind farm licenses, and that license decisions which do not comply with the currently applicable regulatory framework is stopped.

The Ministry's report on the license system

The Ministry's report states that the Government will continue to facilitate for the development of new and profitable onshore wind farms in Norway. At the same time, it is emphasized that further development must happen at a pace that does not lead to unreasonable negative consequences for important environmental and local interests. The proposed amendments to the license system aim to reduce the conflict level and local opposition that have recently been seen in some projects under construction, inter alia by increased involvement from local authorities and stricter deadlines and licensing requirements  for the developer.

The report will be subject to debate in the Parliament after the summer.

Key amendments proposed in the Ministry's report:

  • Joint regional processing of new applications
    The Ministry proposes that new license applications within the same region should be processed together.  In order to achieve this, NVE (the Norwegian regulatory authority) will set a deadline for when new projects within a region must be notified to NVE in order to be considered. Projects that are not notified within the deadline will as the main rule not be considered  until after a final decision has been made with regards to the projects that were notified within the deadline.

    The Report also proposes that regional and local authorities should be more involved in the license process than today. NVE will publish a new guideline for the application process that will clarify the roles of the regional authorities and other stakeholders.
  • Introduction of new deadlines
    The Report proposes the introduction of the following new (and strict) deadlines:
    • The environmental impact assessment must be completed within two years after the impact assessment programme for a new project is approved by NVE.
    • The detail plan must be submitted to NVE within two years after the license is awarded.
    • When approving the detail plan, NVE will set a deadline for commencement of the construction works. This deadline will vary based on the individual project, but will normally be 2-3 years after the approval of the detailed plan.
  • New and clearer license conditions
    The current standard license conditions will be revised, with the aim of imposing clearer restrictions at an earlier stage of the license process. New licenses will contain a maximum height requirement. Conditions such as minimum distance requirements to residential buildings and required use of radar systems for aviation lights are mentioned as examples of conditions that are expected to be relevant for many new projects.
  • More emphasis on environmental matters
    Stricter requirements for the environmental impact assessment will be introduced. Local authorities will be involved in the environmental impact assessment to a larger degree, and a larger number of neighbours shall be notified in the process. The knowledge and basis for assessing the socio-economic impact of wind farms will be strengthened. 
  • Better coordination with grid operators
    The license authorities will introduce a requirement that available grid capacity is assessed earlier on in the licensing process. The project developer will be required to document contact with the relevant grid operators, and to submit plans for any upgrades of the grid system that are deemed to be required.
  • Separate review of local compensation tax
    The Ministry does not propose any amendments to the current tax regime for onshore wind farms at the present stage. However, it is stated in the Report that a separate review will be conducted with regard to a potential local compensation tax to municipalities for onshore wind farms.

The Parliament's resolution regarding existing wind farm licenses

On Friday 19 June the Parliament unanimously passed a resolution requiring the Government to review whether existing onshore wind farm licenses have been granted in accordance with the Energy Act and the Public Administration Act. If errors are discovered, the regulatory authorities are asked to stop the relevant decision/license.

The scope of this review is unclear, including whether it will involve projects already under construction or only projects that have been granted licenses but where construction is yet to start. In any event, the regulatory authorities' license decisions and subsequent detail plan approvals are normally made after thorough considerations, and the ability to revoke license decisions that are no longer subject to appeal is generally very limited.

The Parliament's request to "stop" licenses with "errors" is therefore highly problematic from a legal perspective.  The Government's ability to recall licences or impose new license conditions is regulated by law and by the licences conditions in itself. In general the Government can only impose new license conditions if this is necessary due to vital social interests. A wind power facility license can also only be revoked if the initial decision to award the license is considered invalid or if the license holder should go bankrupt or in other ways be unable to fulfil his obligation under the licence.

The Parliament also requested that the regulatory authorities do not grant extensions to the commissioning deadline in existing licenses beyond 31 December 2021, and that no new licenses are granted until the Ministry's report have been considered by the Parliament. This is in line with the policy already implemented by the regulatory authorities.

The Ministry's report is available online (click here).