Regulatory overview

Offshore wind projects require a license according to the Offshore Energy Act, which sets out a comprehensive licensing regime.

The Offshore Energy Act regulates offshore renewable energy production and the conversion and transfer of electrical energy at sea, outside the Norwegian baseline. This includes both offshore wind farms, power cables to mainland Norway and export power cables related to such installations.

The Offshore Energy Regulations further details the licensing process for offshore renewable energy installations. The award system stipulated in the Offshore Energy Act and the Regulations can be seen as a hybrid between the regulations for onshore wind power and the petroleum regulations as it contains key elements from both sectors. We note that the onshore grid installations still will require a license according to the Energy Act.

Offshore renewable energy production requires that (1) an area is opened for offshore wind by the Norwegian Government, (2) a company is exclusively awarded an area for offshore wind development, and (3) the company is awarded a license for offshore wind production according to the Offshore Energy Act.

The Government published the tenders for the opened areas (Sørlige Nordsjø II and Utsira Nord) on March 29, 2023. In the tenders, the Government stated that it will look into the possibility of shortening or simplifying the licencing process for offshore wind and will revert to this on a later point in time. As part of this work it will be considered if the detail plan may be sent in together with the licence application and approved as part of the licencing process.

For Sørlige Nordsjø II the first phase will be awarded to one applicant through pre-qualification, followed by an English auction. Selection will be on the basis of ranking of scores achieved in the pre-qualification assessment.  

Utsira Nord will be awarded to three successful applicants on the basis of qualitative criteria. The project areas must each have a minimum of 460 MW installed capacity and a maximum of 500 MW. 

There are still some topics that needs clarification prior to the award of the opened areas and the later awarding of a license, i.e. how the offshore electricity grid will be regulated for the first projects. The Government has stated that the initial phase of Sørlige Nordsjø II and the Utsira Nord projects will be connected to mainland Norway through a radial, and that the developers shall bear the costs of construction, ownership and operation of the radials. However, for Utsira Nord, the TSO Statnett has recommended that the production area is connected to a substation on either Utsira island or the west side of Karmøy island, and that the developers’ responsibility is limited to installing and operating the radial connecting the area to the substation.

The developers must also expect to cover all relevant costs related to the grid connection of the project, including a financial contribution (NW: anleggsbidrag) to the relevant onshore grid owner according to the Energy Act.

Statnett (the Norwegian TSO) will also formally be appointed as the transmission system operator under the Offshore Energy Act, and will in addition have responsibility for the coordination of the offshore grid.

The Government is furthermore in the process of implementing changes to the tax laws, ensuring that Norwegian and foreign companies are equally treated.

The Ocean Industry Authority (Havindustritilsynet, Havtil) has published a proposal for a new health, safety and environment at work (HSE) regulation covering offshore wind. The proposal is subject to a public consultation, with the deadline to reply being 1 March 2024. We note that the Norwegian Better Regulation Council (Regelrådet) has assessed the proposal and found significant shortcomings in Havtil’s proposal, including inadequate assessments of the need for sector-specific regulation beyond the general HSE framework under Norwegian law, and a lack of comparison with other countries who have not introduced offshore wind-specific HSE rules. Regelrådet also cited concerns over the proposal’s potential cost effects on wind power developers, that may be disproportionate to the benefits achieved.

For more information on the individual acts and regulations see the  proposed guidelines from MPE for the application process for offshore wind, in particular pages 13 – 14. Please note that the proposed guidelines are not yet formalized.