5. Opportunities in the Nordics
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Based on the review of practices and identified barriers in the Nordic countries (chapter 3) and the identified measures or policies (opportunities) for accelerated offshore wind in other countries (chapter 4), we assess in this chapter the relevance of the opportunities for the Nordic countries.
The Nordic countries are at different stages, with different ambitions in developing offshore wind and with different approaches. There is therefore variation in the relevance of potential measures or policies from other countries. The review is thus a relevant contribution to the knowledge base for continued policy development in each of the Nordic countries.
In the following we assess both:
- the relevance of the identified measures in chapter 4 for each of the Nordic countries, and
- to what extent the measures contribute to limiting each country-specific barrier identified in chapter 3.
- The assessments are summarised in Table 5.1, coloured depending on the relevance of the measures for the barriers in each country:
relevant ( green ), somewhat relevant ( yellow ) and not relevant ( red ). The table can be read alongside Table 3.2 (barriers) and Table 4.2 (opportunities). The assessments are explained in more detail below the table.
Driver | Measure | DK | NO | SE | FI | IS | FO | AX | |
Political ambitions and predict-ability | Clear and predictable targets and legislative framework | Relevant for all countries, and fundamental for addressing the other barriers. Germany has three timed and legally binding targets, the UK has clear targets and a strategic vision, and the Netherlands have also followed up targets with a clear pathway and action plan. | |||||||
Profit-ability for developer | Support level and design | Somewhat relevant for all countries, but will depend on the level of political ambitions. Some inspiration from designs in the Netherlands and Belgium, but are continuing processes, especially in DK and NO. Hybrid connections to facilitate export will increase profitability. | |||||||
Regulations | Centralised Tendering System | Somewhat relevant. DK is well developed | Relevant for all other countries. The review highlights stable and predictable conditions in the UK and Germany. More effort is required in SE and FI, and in particular in IS, FO and AX. | ||||||
Stable but adaptive regulation | |||||||||
Efficient permitting processes | |||||||||
Stakeholder involvement | Efficient stakeholder engagement | Relevant for all countries. The model in Belgium contributes to early involvement of stakeholders. | |||||||
Knowledge sharing | Government survey data shared with bidders | Relevant for all countries. Measures in Scotland and Belgium may contribute to more efficient knowledge gathering and sharing. | |||||||
Industrial barriers | Contribute to supply chain development | Relevant for all countries. Industrial strategies in the UK could be a blueprint. | |||||||
Grid connection | Efficient and facilitating grid connection models | Relevant for all countries. In particular the German and Dutch TSO-led models may be relevant for all the Nordic countries. | |||||||
Several of our interviewees stressed the importance of national political predictability, and we summarise this as a clear barrier in subchapter 3.10. The international review in particular points to Germany, with three timed and legally binding targets, ensuring steady progress and predictable sector growth through a phased approach. Beyond set targets, the UK is considered to have a well-defined strategic vision to back up the political ambitions. The Netherlands have also followed up targets with a clear pathway, accompanied by a clear action plan that ensured the achievement of targets. Predictable government commitment enhances industry confidence and acts as a catalyst for offshore wind development. It also provides clarity for renewable energy developers, fostering investment in infrastructure and value chains, and preparing other stakeholders for potential synergies and conflicts.
Binding long-term targets are more relevant for countries that need to replace fossil electricity production than for countries focusing on supplying future demand growth. For countries such as Germany and the UK, the uncertainty with regards to offtake/demand is relatively low, as renewable energy replaces natural gas and coal. For Nordic countries, on the other hand, the development of offshore wind requires more alignment with the energy transition in other sectors. This creates more uncertainty of future offtake and thus complicates the predictability of quantified production targets. However, the need for flexibility on the production side has to be balanced against the long-term predictability for the industry, to ensure sufficient investments in the value chain.
For profitability for developers, some best practices are being developed and applied across countries; auctions and two-sided CfDs are becoming standard. Thus, stable long-term signals on national ambitions are fundamental for signalling the level of government support, e.g. recent developments in Denmark, mentioned in chapter 3. There is, however, also room for deliberate measures for acceleration within this framework. In the Netherlands, the winning bid of a tender receives a full-package permit, which lowers cost and risk. The package includes the lease area, a preliminary study that is sufficient to complete preliminary engineering design, an interconnection substation, and the right to construct and operate the facility for up to 40 years. In Belgium, non-price criteria are used as a prerequisite to participate rather than award criteria. If a bidder complies with all pre-qualification criteria, they enter into the award process, where the price is weighted 90 per cent.
For regulations, Denmark is also considered somewhat more developed than the other Nordic countries, meaning the relevance is higher for the other countries than Denmark. One-Stop Shops are becoming the standard practice, in addition to central planning of site allocation. In addition, the UK has a clear and stable regulatory framework, including a streamlined, time-bound approval system for major offshore projects, and Belgium has worked consistently over time to develop and integrate a marine spatial plan for early and effective spatial planning.
Stakeholder involvement is a challenging barrier, as consultation with and involvement of stakeholders contribute to limiting consequences for other interests. Measures to reduce the time for consultation will contribute to accelerated deployment, particularly in Norway and Sweden, and earlier involvement and clarification among municipalities and defence interests will contribute to accelerated deployment in Sweden and Finland. In particular, the Belgian model of early engagement of stakeholders through their marine spatial plan may be relevant for all the Nordic countries. Also, Scotland has focused on mandatory pre-application consultation of stakeholders, where developers must consult with key stakeholders, prior to submitting the formal application.
Knowledge gathering and sharing may be a barrier relevant for all Nordic countries, when the timing is not optimal (e.g. due to seasonality) or when sharing existing information is quicker (and more efficient) than gathering new information. The Dutch and Belgian governments have recently focused on providing preliminary site surveys and EIA to bidders. This reduces investment risks, leading to more competitive bids and streamlined project execution. It also facilitates stakeholder involvement and contributes to quicker permitting processes.
Industrial barriers are also relevant for all Nordic countries: the markets for labour, vessels and turbines are global, or at least European. Port infrastructure is more country specific, where Denmark is more developed than the other countries. Industrial strategies in the UK incentivise local content and manufacturing and may thus help reduce the barrier. At the same time, with the supply being global, other processes (e.g. reduced demand for renewable energy in the US) may be more determining for the barrier than measures the Nordic countries undertake. The countries are more in control of developing port infrastructure, which may facilitate practical deployment.
Lastly, the organisation of grid connection may be a barrier to offshore wind deployment. TSO-led models implemented as one-stop shop policies in Germany and the Netherlands are likely relevant to facilitate deployment in all of the Nordic countries. In Germany, the TSO is responsible for offshore grid planning and bears the cost for the connection from the sea platform. In the longer term and with more activity, more extensive models may be beneficial, e.g. see the textbox below.
Gas infrastructure in the North Sea and the Norwegian Sea
Norway’s offshore gas infrastructure, with state involvement, neutral operations, collective ownership and regulated tariffs, provides a comprehensive model for organising offshore infrastructure of possible relevance for offshore wind grid systems. Efficient systems for transporting gas contribute to national objectives of value creation from petroleum extraction. Some of the oil and gas is transferred in pipelines to onshore facilities, to Norway or directly to the UK and continental Europe. The infrastructure is regarded as cost-effective and reliable, thus giving Norwegian gas a competitive edge.
The total length of the Norwegian gas pipeline network is almost 9,000 kilometres. The infrastructure is controlled by the Norwegian government, with important motivations being the major investments needed and that multiple companies rely on its services. The infrastructure is regarded as a natural monopoly. Government ownership contributes to equal access to capacity in the system on the basis of companies’ needs and for tariffs by socio-economic principles.
The original dedicated gas transport solutions for individual fields have been transformed into an integrated system serving most of the Norwegian continental shelf. Three onshore gas processing plants, Kårstø, Kollsnes and Nyhamna, are integrated with the pipeline network, and receive rich gas from the fields. Dry gas is separated from the rich gas for onward pipeline transport to receiving terminals abroad. There are four receiving terminals for Norwegian gas in continental Europe (two in Germany, one in Belgium and one in France) and a further two in the UK.
The operator Gassco, the joint venture Gassled and regulated access to the transport system are important elements of the framework. Gassco was established in 2001, and is state-owned. Gassco is the neutral, independent operator of the gas transport system. They develop new infrastructure, administer system capacity, and coordinate and manage gas streams. They also run the infrastructure in accordance with legal requirements. As the system operator and the actor with the best overview of the system, Gassco has the task of further developing integrated Norwegian gas infrastructure. This means for example that when major development projects are being evaluated, gas fields other than those that have a clearly defined need for gas transport must also be taken into consideration. Interactions between new and existing infrastructure must also be part of the assessment. Gassled is a joint venture that owns most of the gas infrastructure. The aim of the joint venture is to avoid conflicts of interest, for example when deciding which pipeline should be used to transport gas from a particular source. Petoro manages the State’s direct financial investments in petroleum activities (SDØE) on the Norwegian continental shelf. They hold rights in extraction licences, fields and transport infrastructure.
