New White paper on offshore wind licenses and proposed amendments to the Offshore Energy Act
The Ministry of Petroleum and Energy has just published a White paper on offshore wind licenses. The White paper defines, among other things, which criteria will determine who will be granted a license in the opened areas Sørlige Nordsjø II and Utsira Nord. The Ministry has also announced that NVE will be commissioned to identify new areas for offshore wind production. The Ministry aims to designate new development areas by 2023.
Clarifications in the White paper
After the decision to open the areas Sørlige Nordsjø II and Utsira Nord was made in June 2020, a number of players have shown interest in the development of wind power on the Norwegian Continental Shelf.
However, neither the Offshore Energy Act nor the Offshore Energy Regulations, which entered into force on 1 January 2021, have provided answers to how the Ministry is to decide which of several competing players will be given development rights to the different areas.
The Ministry's new White paper now clarifies both this and a number of other matters related to the license application and licensing process.
The key steps in the area award process can be described as follows:
According to the Ministry's White paper, the final choice between competing applicants will as a main rule be made based on an auction process.
Auction process for Sørlige Nordsjø
The license area Sørlige Nordsjø has a sea depth that is suitable for the development of bottom-fixed wind power. The Ministry envisages granting 2-3 licenses.
The grant process will consist of an initial pre-qualification process, while the final granting of areas will be decided through an auction process where only qualified players will have the opportunity to participate. The Ministry has stated that it intends to announce the auction for Sørlige Nordsjø in the first quarter of 2022.
Qualitative criteria for licensing in Utsira Nord
Utsira Nord has different depth conditions than Sørlige Nordsjø, and the conditions make the area suitable only for floating wind power development. The Ministry's assessment is that – in contrast to what is the case for bottom-fixed wind projects – it is not yet possible to develop commercially viable floating wind projects without state aid. For this reason, an auction process is not considered expedient.
The Ministry aims to grant at least three licenses within the Utsira Nord license area. The license will here be granted according to qualitative criterias, where, among other things, emphasis is placed on social profitability, financial capacity and technical competence.
Designation of new areas
Simultaneously with the launch of the Ministry's new White paper, NVE has been given the task of identifying new relevant areas for the development of both bottom-fixed and floating offshore wind. NVE will lead the work of conducting impact assessment of relevant areas. The Ministry aims for new areas to be opened by the end of 2023.
Statnett as system operator
The investment in offshore wind also requires a coordinated development of the offshore grid. The Ministry will therefore designate Statnett as system operator for the production and grid installations that fall under the Offshore Energy Act. As system operator, Statnett will be responsible for coordination and balance in the offshore grid. Statnett's function as system operator will not apply to installations that have a license under the Petroleum Act.
Changes in the Offshore Energy Act and the Offshore Energy Regulation
The new mechanism for awarding development areas will be implemented by an amendment to the Offshore Energy Act and the Offshore Energy Regulation.
Read the Ministry's consultation paper on the proposed amendments here.
Read the Ministry's White paper here.