Where is the law in the wind?
Icnacio Herrera Anchustegui discusses key issues that require legal answers in offshore wind.
Norway’s ambitions related to offshore wind are promising. With some of the world’s best wind resources on our shores and arguably the world’s leading industry in offshore operations, the combination sounds like a match made in ocean-heaven. Yet, despite years of interest, plans and seeing how our neighbors pick up the pace and Norwegian companies are successful abroad, little if anything has happened in Norwegian waters.
On 11 June 2021, the Norwegian Government published its White Paper "Energi til arbeid" om langsiktig verdiskaping fra norske energiressurser. This document, arguably one of the most important road maps in the energy history of Norway, highlights the importance of wind energy to create new jobs, develop technology and contribute to a cleaner and more energetic world.
The wind discussion in Norway is a passionate topic. Both for those promoting offshore wind as an alternative energy source and a way to diversify our offshore expertise, as well as the opponents, who argue that the environmental risks and/or effects on electricity prices would be detrimental. One aspect that is often forgotten, but crucial in these discussions, is the role of law.
Offshore energy regulation has been in place in Norway for more than a decade already. The Offshore Energy Act (Lov om fornybar energiproduksjon til havs) from 2010 opened the door for concessions to be granted. Just as it is intended to do now with Utsira Nord and Sørlige Nordsjø II. However, despite the law being in place, it took ten years to develop it, with the Regulation of the Energy Act (Forskrift til havenergilova) adopted in 2020. With "Energi til arbeid", the Government has also proposed a "Guidance" document to determine who will be awarded a license to develop an offshore wind farm in the 2 designated areas in the future. Still, after 11 years, the rules of the offshore wind game are still unclear and being developed.
The regulatory framework in which offshore wind takes place is vital. Law helps to define in which way technological development will be put to work, reduces conflict among different stakeholders and interests groups, protects the environment and creates a stable and predictable landscape for investment to take place.
In the Bergen Offshore Wind Centre we conduct academic research to analyze ways in which regulation and rules interact with offshore wind farms. Our research has pointed out deficiencies in the Norwegian system that may explain why the development has been so slow. Also, we seek to understand how other countries deal with the same problems and challenges so that we in the future will learn lessons and improve practices.
Considering the upcoming elections and discussions to be held about the future of offshore wind in Norway, we would like to call upon the attention of policymakers about a few key issues still in need of legal answers:
- There is some unclarity concerning the regulatory models applicable to transmission cables to and from offshore wind farms. This includes several aspects, such as: ownership options, operation, rules for purely national connections as well as hybrid models (national and international models).
- Norway claims that the EEA agreement does not apply beyond its territorial sea. This leads to an 'especial' application of EEA rules to some but not all projects or parts of them. Also, it could be challenged whether Norway’s interpretation of the EEA scope of application is indeed correct. The repercussions of EEA rules applying or not are enormous to a project.
- Very much connected to this is the lack of application of certain European rules connected with the protection of the environment and the performance of environmental impact assessments. Our colleague Sigrid Eskeland Schütz has published extensively concerning environmental protection of Norwegian sea waters.
- Also, the legislation of Norway must find adequate ways to deal with uncertainty and change of conditions of an offshore wind project through its lifetime. This complex topic is under the study of our colleague Eirik Finseraas.
- How to best accommodate and balance the interests of different stakeholders and sea users to minimize conflict? Onshore wind has been a poor example of how the regulatory framework might do this – with protest arising after a license has been granted and even now leading to a standstill in their granting. This example is pressing in telling why stakeholder considerations need to be properly addressed and integrated further as we discuss in detail in Distributive Justice, Community Benefits and Renewable Energy: The Case of Offshore Wind Projects. Such conflicts and public perceptions of wind power in Norway are also part of the DeWindSea project, led by Sigrid Eskeland Schütz and Michael Tatham.
- Norway has ambitions to lead the world in offshore renewable energy solutions and clean oil and gas production. Sector coupling solutions require a revision of the regulatory framework, as the law has been thought of for dealing with only one type of energy. We could use this momentum to beat the forefront of rules designed for complex energy systems. We have done some research already regarding this in: Wind of Change: A Scandinavian Perspective on Energy Transition and the ‘Greenification’ of the Oil and Gas Sector and Is Hywind Tampen’s State Aid Approval a Kickstart for the Norwegian Offshore Wind Industry?
- Finally, the implications of rules concerning sustainable finance and mortgage instruments related to offshore wind turbines and investments are still the subject of ongoing discussion. Clear and predictable rules are needed to ensure maximization of private investment, as remarked on several occasions by our colleague Berte-Elen Konow.
In the middle of the offshore wind enthusiasm, we cannot simply overlook the importance of good regulation. We have been the world leaders in regulatory schemes for oil and gas. Why not do the same for offshore wind?
One aspect that is often forgotten, but is crucial in these discussions, is the role of the law