Introduction
On Friday, the government, through the Ministry of Energy, introduced several proposed amendments to the Energy Act. These changes relate to the licensing process for renewable power production and network development. The purpose of the amendments is to facilitate a more efficient, transparent, understandable, and predictable licensing process for renewable power production and network facilities. Below, we will review key parts of the proposed changes.
Efficiency and Release of Resources at NVE
The proposed changes involve a series of measures aimed at freeing up processing capacity at the Norwegian Water Resources and Energy Directorate (“NVE”). The Ministry believes that streamlining and simplifying the processing, along with clearer requirements for progress in projects that have been granted a license, will contribute to faster development of new renewable power production and increased network capacity. The proposal also aims to prevent applications for licenses for projects that the project owner does not have realistic plans to realize within a reasonable time horizon. Freed resources at NVE could benefit the processing time of realizable projects. However, the proposal does not introduce any new requirements or deadlines for the actual processing time at NVE.
The proposal’s requirements for project progress include deadlines for construction start and commissioning, where the deadline for construction start is five years from the license decision and the deadline for commissioning is five years from construction start. The progress requirements will likely reduce conflicts, as it is challenging for municipalities and local populations to deal with unresolved projects over a long period. This will also provide greater predictability for those affected by the project. Furthermore, a long duration between license granting and realization can be an obstacle to the development of projects, for example, due to increased development costs or outdated knowledge bases. Conditions set in the license may become inappropriate at the time of development if circumstances change.
Other Proposed Changes
Further, the government proposes to extend the maximum duration of new facility licenses from 30 to up to 50 years. This facilitates greater adaptation to the facility’s assumed technical and economic lifespan.
The government also proposes a legal basis to require licensees to conduct follow-up studies of the effects of developed facilities. If these studies indicates that there is a basis to tighten or relax the requirements in given permits, it may become appropriate to amend the relevant permits under § 10-4 of the Energy Act. Another important point is that the government wants to introduce a legal basis to terminate the processing of unrealistic and deficient energy projects at an earlier stage in the licensing process. This way, NVE can free up its resources and use them on projects that are likely to be granted a license.
Another proposal is to introduce a duty for area licensees to extend the network all the way to new power plants up to and including 22 kV. This will mean that many small power plants and solar power facilities will no longer need to apply to NVE for a separate license for network connection.
The Renewable Energy Directive
The 2018 Renewable Energy Directive (“RED II”) is part of the EU’s Fourth Energy Package, also known as the Clean Energy for all Europeans. The directive was one of the regulations that split the government, leading to The Centre Party’s exit from the government in January. RED II includes requirements for simplification and streamlining of the licensing processes for renewable power production. It sets deadlines for the licensing authorities’ handling of license applications, stipulating that licensing processes should not exceed 2-3 years, and mandates a maximum processing time of 1-2 years for small facilities (under 150 kW). The deadline is calculated from the receipt of a complete license application and until NVE has decided whether to grant a license or not.
Although the government’s proposal to amend the Energy Act aims to streamline the licensing process, the proposed changes are unlikely to meet the processing requirements set forth by the 2018 Renewable Energy Directive. Therefore, the implementation of RED II will necessitate specific deadlines and processing requirements for the licensing authorities.
The Further Process
The bill has now been sent to the Parliament for the further legislative process. If the changes are adopted, this could benefit power producers who wish to expand renewable power production, as the processing time will be shortened and the procedures streamlined. The streamlining and focus on realization rate could also benefit the municipal planning clarification required for new onshore wind power projects.
The full text of the proposition can be read here (in Norwegian).