Hogan Lovell OffshoreBook 2023 230809 OnlinePDF - Flipbook - Page 185
Offshore Wind Worldwide 2023
4. OFFTAKE ISSUES
4.1 Offtake, remuneration
and tariff scheme
The Ministry of Petroleum and Energy has
proposed to use a two-sided CFD as the
support model for the first phase of Sørlige
Nordsjø II and Utsira Nord. The contract
price (strike price) will be decided through
an auction, with a monthly reference period.
The Ministry has suggested that the CFD
support scheme should be valid for fifteen
years from commencement of operations,
which will in effect guarantee the developer’s long-term power price during the first
part of the operational phase.
When announcing the area in Sørlige
Nordsjø II and Utsira Nord, that both support from the state and the payment from
the producer will be limited by an upper ceiling. The government has presented a proposal to set the limit to NOK 15 billion. The
level of support will depend, among other
factors, on electricity prices and the amount
of electricity produced. The contract for
difference scheme is still subject to approval
from both the Norwegian parliament and
the EFTA Surveillance Authority (ESA).
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As the CFD is set to be a solely financial
instrument, the developer will in parallel be
required to sell the produced electricity in
the market for its own account and risk
In 2019, Hywind Tampen was granted NOK
2.3 billion in investment contribution for the
project from the state-owned entity Enova.
The industry’s NOx fund supported the
project with NOK 566 million.
4.2 Consequences of
a project delay
The licensing process under the Offshore
Energy Act contain several statutory deadlines, including a deadline for the license
application, submission of the detailed
plan and commencement of operation. In
case the developer fails to comply with any
of these deadlines related to the progress
of the project, the revoked. However, the
licensing system also includes the possibility to apply for extensions to the statutory
deadlines.
