China Desk Newsletter - 可再生能源的新动向 Renewable update

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Published 02 July 2020
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The Norwegian Ministry of Petroleum and Energy (MPE) has recently opened two new areas (Utsira Nord and Sørlige Nordsjø II) for potential offshore wind power development. The MPE has also adopted a new regulation to the Offshore Energy Act with detailed regulation of the offshore energy licencing regime. Regarding onshore wind, the MPE has just 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. The Parliament has also required that the Government should review existing wind farm licenses and examine if all regulations and requirements have been complied with. In the case of non-compliance, the Parliament has asked the Government to "stop" the licences.

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UPDATE ON ONSHORE WIND IN NORWAY

The Ministry's report on the onshore 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 onshore 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 onshore 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 for onshore wind
    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 onshore 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.
  • New and clearer license conditions for onshore wind plants
    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 onshore wind farm licenses

In the end of 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. An onshore 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 onshore licenses beyond 31 December 2021, and that no new onshore 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 here.

UPDATE ON OFFSHORE WIND IN NORWAY

Offshore wind is high on the agenda for both Norwegian authorities and the offshore industry. The utilization of the Norwegian wind resources offshore is still in an early phase. The passing of a new regulation to the Offshore Energy Act together with the opening of two new areas for potential development, are however important steps towards the realisation of full scale offshore wind projects in Norway.

New areas opened for offshore wind projects: Utsira Nord and Sørlige Nordsjø II
The areas Utsira Nord and Sørlige Nordsjø II have been opend for applications for licences from 1 January 2021. Utsira Nord, 1010 km2, is situated west of Utsira and Haugalandet on the west coast of Norway and is suited for floating offshore wind (FOW). Sørlige Nordsjø II, 2591 km2, has more shallow waters which will allow for bottom fixed installations. This area borders to the Danish economic zone and could therefore be suitable for direct import. Combined, the two areas allow for the development of 4 500 MW of wind power.

The licencing regime for offshore wind

The new regulation which comes into effect from 1 January 2021 clarifies the regime for processing and assessing license applications. Offshore wind power plants/installations cannot be built without a licence.

In short the licence application process will be structured as follows:
Step 0: Preliminary studies – opening of areas - It's only possible to apply for licence to build and operate offshore wind facilities in areas which have been opened for development
Step 1: Notice – proposed program for environmental impact assessment
Step 2: Hearing of notification
Step 3: Environmental impact assessment/impact study
Step 4: Licence application (must be sent within two years after the impact study was decided)
Step 5: Assessment of the licence application
Step 6: Handling of potential appeals
Step 7: If licence is awarded: Detail plan must be submitted for approval within two years
Step 8: Approval of detail plan
Step 9: The offshore wind plant must be built within three years following the approval of the detail plan.

MEP's press release on opening of new areas for offshore wind (read here).