On the political level the attitude towards offshore wind power seems to be very positive, which is reflected in the fact that several countries have established ambitious targets for the exploitation of offshore wind power (see draft report from cluster 4), with corresponding support mechanisms.
In the most ambitious plans several 1000 MW offshore wind power plants are planed for within 10-25 years. In most countries, however the energy policy targets do not distinguish between onshore and offshore wind.
Planning rules and regulation only exist in some countries, but can be foreseen in the coming years.
The fact that the legal framework is still under construction and unclear in many countries is to be regarded as a major limiting factor to the development of offshore wind energy.
Moreover, national planning rules may vary significantly within the EU, and even on the national level, different and confusing legal frameworks exist within individual countries. Different regulations regarding the same subject exist in several countries, depending on whether a proposed farm is located inside the 12 nautical mile zone (often referred to as territorial sea) or outside (exclusive economic zone, extending from the 12 nm zone seawards to a maximum of 200 nm from the shoreline).
An example is Germany, where both federal and state law is applicable within territorial water, whereas only federal law is applicable further away from the cost.
For a detailed analysis of policies and regulations in Northern Europe (2000), please refer to the Dutch study carried out by Ecofys [xxxiii].
Table 5.2.1. below, presenting national planning rules and regulations in the member states of the Concerted Action, has been based on responses from CA-members.
|
Table 5.2.1. National Planning Rules and Regulations |
|
|
BE |
Offshore wind energy legal framework is clearly defined, in: Law on concessions for offshore wind and wave energy plants (as part of general electricity regulation law). Law on (environmental) authorisations for all off-shore installations Law on environmental impact reporting for all off-shore installations Some remaining uncertainties due to necessity of regional authorisations for grid connection. |
|
DK |
The Danish Energy Agency is authorising offshore wind farms inside as well as outside territorial waters. Planned 4000 MW before 2030. A national committee has pointed at specific potential areas of which 750 MW will be utility developed and serve as pilot projects to be established before 2008. There are ongoing negotiations to have 150 MW of these 750 MW owned and developed by cooperatives. After 2008, the offshore wind energy sector will be subject to the same rules as for offshore gas and oil exploitations, i.e. open bidding procedures. |
|
FI |
EIA requested from >50 MW power plants. Suggested for > 10 MW wind farms. Regional planning authorities. Local planning permission needed. (Depending on regional land use plan) National "Waters Act" "Environmental Protection Act" |
|
FR |
No specific rules. The work of the CA is taken as a guide for future rules (like for onshore wind farms in the 80s) |
|
GE |
Within 12 to 200 miles zone the National Authority for
Sea Traffic and Hydrography is the entity for permissions, legal basis is the
international bill of sea rights together with a national regulation for
building and operation of plants in the 12 to 200 miles zone. |
|
GR |
Legislation for renewable energy sources applies also to large-scale offshore wind energy |
|
IR |
Procedures for applying for foreshore licenses (to investigate site suitability) and foreshore leases (to develop wind farms) published. Applications made to Department of the Marine and Natural Resources Offshore wind farms will not, as a general rule, be allowed within 5 km of shore. Certain areas are identified as prohibited to ensure safety at sea, protection of established shipping lanes, air navigation, telecommunication needs and defence requirements Planning permission required from relevant local authority for onshore infrastructure associated with offshore wind farms. |
|
IT |
Planned 2500 MW on- and offshore within 2010 according to the National White Paper of 1999. Only a small fraction of this target expected to be offshore. Total offshore potential is about 3000 MW. The Italian Navigation Code (INC) and the Application Guide of INC (AGINC) are the reference legislation for offshore wind farms installation in the Italian national waters; specifically art.36 and following of INC and art.5 and following of AGINC (for the type and format of application documents). Special permits should be considered for offshore Wind Farms, because of the long time limitation related to their presence for the activity of navigation, fishing, marine sport, and others. Many other Administrations are involved in processing the installation permits: Ministry of Transport, of Defence, of Environment, of Industry, of Civil Works, of Sea and Terrestrial Resources (General Direction of Maritime Fishing) and others. The Environmental Impact Evaluation should be considered necessary, even though no clear policy is applied today. At the end of the procedure the Permits are issued by the Compartment of Maritime Transport and shown to public office of interested Municipality and Province for public information and possible opposition. The installation of Offshore Wind Farm and Permit applications is under the control of the local Harbour Authorities by their presence Coastal Guard. Safety features for navigation and aviation are requested in the Permit. Information on the offshore plants is due to Marigrafico office for its inclusion on the nautical charts. |
|
NL |
Within the 12-mile-zone, apart from a near shore wind farm pilot project (NSW), no wind farms will be allowed. There are practically no Dutch regulations and rules existing for large-scale offshore wind energy outside the 12-mile-zone. This could be positive or negative depending on political will. However, there are several laws and regulations that have to be considered when licenses in the Dutch Exclusive Economical Zone of the North Sea must be gained. These regulations are: Sea Water Pollution Law (Wet Verontreiniging Zeewater) Environmental Administration Law (Wet Milieubeheer) Spatial Arrangement Law (Wet Ruimtelijke Ordening) Environmental Protection Law (Natuurbeschermingswet) Governmental Water Works Administration Law (Wet Beheer Rijkswaterstaatswerken) Wreckage Law (Wrakkenwet) Monuments Law (Monumentenwet) Excavation Works Law (Ontgrondingenwet) North Sea Installations Law (Wet Installaties Noordzee) (Sea) Bottom Protection Law (Wet Bodembescherming) Mining Laws 1810, 1903 & EEZ (Mijnwetten 1810, 1903 & NCP buiten 12 mijl From recent studies, it seems that this law has no implications for offshore wind farms) Route Law (Tracwet This law is important for the seaways to be chosen) |
|
PL |
Very broad planning rules of the Construction Law referring to constructions at sea, Energy Law pointing at the necessity of implementation of renewable resources. |
|
SE |
Legal framework under construction. In a recently published study carried out by the Swedish Energy Agency [xxxvi], and initiated by the government with aims to make standards for the future offshore wind power, it is proposed that 3,300 MW of offshore wind power is to be developed within the next 10 to 15 years. Seven offshore areas have been suggested as locations of special interest, first of all in the Southern part of Sweden. For the moment a number of pilot projects are planned, and the intention is to follow these carefully during the whole planning and construction-process. It is expected that the current regulations (2001) are soon to be revised and simplified: Building Permit required from local authorities (municipality) building and planning committee, according to the Planning and Building Act. Permit required from local County Administrative Board concerning environmental issues (according to the Environmental Code). For projects larger than 10 MW, permits are issued by the Environmental Court concerned. Application for water operation permits shall be considered by the Environmental Court The government shall assess the permissibility of wind farms inside territorial waters if they are consisting of clusters of three or more wind turbines with a total output of not less than 10 MW. Construction of wind farms outside territorial waters requires permission from the government. The Swedish Energy Agency issues permits regarding cabling |
|
SP |
Legislation for wind energy onshore applies also to offshore |
|
UK |
Defined procedure for obtaining site lease from Crown Estates (who is the landowner of most areas within the 12 nautical mile limit). First round of site allocations was made April 2001, where the location of 13 potential offshore wind farm sites was announced. Each site will consist of 30, 60 or 90 turbines. Consents process still evolving but expected to include: Dept of Trade and Industry (DTI) provide one-stop consenting assistance but Dept for Transport Local Government and the Regions (DTLR) and Dept for the Environment Food and Rural Affairs (DEFRA) also involved. Undertake Environmental Assessment and consultation leading to EIS. Apply to DTI under the Electricity Act 1989. Apply to DEFRA under Food and Environmental Protection Act 1985. Apply to DTLR under the Coastal Protection Act 1949, or Transport and Works Act 1992. |
In order to promote wind power (including offshore) most European countries
have implemented support mechanisms, utilising a wide area of support
mechanisms. The four main mechanisms applied are investment subsidies, tax
exemptions, fixed tariffs and green certificates, often in some combination.
The responses to the questionnaires indicate that it is not only the amount of subsidies that determine the success of the schemes, but also the extent to which the income is safeguarded into the future. This is clearly indicated for e.g. the Swedish case, where the amount of subsidies obtainable appears promising, but where the schemes are modified too frequently for the schemes to make investors and creditors confident. Given the size of the investments and the relatively long payback times covering energy production facilities in general, risk evasive measures become of central importance.
To put it more directly: investors are generally willing to take risks, as long as the magnitude of risks is known. This requires that the support mechanisms are put into operation for periods long enough to cover at least the project planning period (so the initial feasibility study is also valid when it is put into operation). Two schemes that have obtained this are the former Danish and actual German feed-in tariff systems, which have secured significant investments in wind power, but other mechanisms might achieve the same goal if applied with care.
The ongoing liberalisation of the European energy sector has introduced significant uncertainties on subsidies, as the whole subsidy schemes have been revised, in order to comply with EU common market requirements. In some countries the procedure of exchanging old support mechanisms with new ones has been delayed, putting developers in a hard situation, not knowing which rules applied.
In general the liberalisation procedure seems to result in the subsidy schemes being harmonized towards the green certificate model, awarding wind power an extra bonus, determined by a certificate market. In the Netherlands such a scheme is already in operation. For other countries the schemes are not finally put in place, introducing significant uncertainties on future prices, as can be seen from the tables below.
March 2001, European Court of Justice made an important decision concerning the future of price support for the development of renewables, as it decided that The German Feed-in Law (the Stromeinspeisungsgesetz) was not state aid. The court also stated that the German rules were in compliance with internal market rules, as they were intended to help achieve environmental objectives, which are a priority for the European Community.
This decision makes it possible for member states to implement similar schemes without challenging European state aid rules, as these rules are not considered to act as barriers for countries that set an obligation to purchase electricity from renewable sources [xxxiv].
Since the time of this decision, the future of the green certificate market is becoming increasingly insecure, as the feed-in tariffs in Spain and Germany can now continue. Furthermore, a law on renewables resembling the EEG in Germany has boosted the very promising market in France.
A review of national incentives (2001), based on [xxxv] results in the following survey relevant for offshore:
Table 5.3.1. The top 11 Offshore Markets
|
Country |
Market support |
Tariff, EUR/kWh |
|
Denmark |
Moving from fixed price to green certificates market |
min. 0.057 over 10 years ? |
|
France |
Guaranteed access, fixed feed-in tariff |
app. 0.07 over 15 years |
|
Germany |
Feed-in tariff |
0,091 |
|
Greece |
Guaranteed access, fixed feed-in tariff on mainland and interconnected islands |
0.06 |
|
Ireland |
Fifth round of Irelands Alternative Energy Requirement competitive bidding process has price cap of EUR 0.048/kWh over 15 years for projects larger than 3 MW. |
0.048 for projects larger than 3 MW over 15 years (25% of which is linked to the Consumer Price Index) |
|
Italy |
Moving from relaxed fixed price system, with 2001 buy-back prices being EUR 0.124/kWh for the first eight years and EUR 0.069/kWh for the remaining lifetime, to green certificates market in 2002 |
0.124 for the first eight years, 0.069 for the remaining lifetime
|
|
Netherlands |
Green certificates market introduced medio 2001 |
app. 0.077 |
|
Portugal |
Interest-free loans, fixed tariff of EUR 0.06/kWh |
0.06 |
|
Spain |
Fixed payment EUR 0.0626/kWh or EUR 0.028/kWh on top of average market price |
0.0626 +0.028 |
|
Sweden |
Investment grants and payment of app.
EUR 0,046 |
0.046 ? |
|
UK |
New system will link green certificates, worth app. EUR 0.047/kWh to obligation on power suppliers to buy renewables |
0.047 |
For further details and an evaluation of the national incentives, where relevant, please see table 5.3.2. below.
|
Table 5.3.2. Description and evaluation of National incentives to promote offshore wind energy |
||
|
Description |
Evaluation |
|
|
BE |
Currently existing incentives are limited to Independent Power Producers and to projects smaller than 10 MW. A new system based on green certificate trading and a renewable energy quota with penalties for the 2 main Belgian regions (Flanders and Wallonia) is expected soon. |
N/A |
|
DK |
1. Utilities have until now been obligated to buy the energy produced by wind turbines.
2.
The feed-in tariff is currently DKK 0.33/kWh
(EUR 0.044/kWh) plus green certificates varying from DKK 0,1/kWh to DKK
0,27/kWh (EUR 0.013-0.036/kWh) running for the first 42,000 hours of an
offshore project with the rated power in typical places, app. 10 years. For
the Horns Rev and Rdsand projects, a tariff of DKK 0,453/kWh (EUR 0,06/kWh)
has been set. After 42,000 hours with the rated power the price will be based
on the day-to-day market electricity prices plus green certificates. 3. Public support for feasibility studies for cooperatives |
The uncertainty not knowing the prices (due to the introduction of green certificates) makes people reluctant. As a consequence, no onshore turbines have been planned since the green certificates were introduced. The fixed feed-in tariff was securing continuous investments in wind energy, but had to be given up because of political resistance and liberalization requirements. |
|
FI |
Investment subsidy of 25-30 % given by the Ministry of Trade and Industry. A part of the energy tax is refunded (0.04 FIM/kWh). |
N/A |
|
FR |
No specific incentive for offshore. |
N/A |
|
GE |
There is no firm governmental planning to develop offshore wind energy in Germany; Germanys Renewable Energy Sources Act (EEG Erneuerbare Energien Gesetz) continues the reimbursement at a fixed feed-in tariff.
In the reformed EEG a specially raised tariff is foreseen during the first nine years of operation of an offshore wind farm. This regulation is limited to projects coming online before the end of 2006. |
The Development of wind energy in Germany under the umbrella of a fixed feed-in tariff system is seen as a major success and as an appropriate tool to develop a strong market.
No evaluation as of yet indication for attractiveness is the large number of projects applying for permissions in the German Bight. |
|
GR |
i) Subvention of up to 50% of the capital investment, ii) subsidization of loan interest, iii) tax-exemptions |
N/A |
|
IR |
No specific incentive for offshore wind farms. The Alternative Energy Requirement (AER) competitive bidding process is open to offshore wind energy. The target in AER V for wind energy is 240 MW, 40 MW of which is reserved for small-scale (≤ 3 MW) wind farms. There are also plans for a Grid Upgrade Development Programme to accommodate additional renewable energy based generating capacity. |
While AER V is open to offshore wind energy projects, planning permission must be evidenced in order to participate in the competition, which will effectively exclude offshore wind farms. |
|
IT |
Green certificates, region structural funds |
N/A |
|
NL |
* System of Green Certificates. Spot market mechanism combined with a Balancing Market in the Amsterdam Power Exchange. * Fiscal incentives: Subsidies, REB (eco-tax), Vamil, Fiscal incentives do not yet apply outside the 12 nm zone. |
Green certificates introduce more stability in the renewable energy market, which is a main requirement for potential investors. Spot market mechanism combined with the Balancing Market in the Amsterdam Power Exchange will positively affect the wind energy market. (Ref. Funtionele eisen van offshore winden, Kema, dec. 1998, pg. 15) |
|
PL |
None. |
N/A |
|
SE |
There are currently no earmarked incentives focused on offshore wind power. The general support for introducing wind power in the power system is: 1. Investment aid, 15% of the total investment in a wind power plant is paid as a state subsidy. 2. Environmental bonus which is connected to the tax system for electric power , from 1 Jan 2001, 0,181 SEK (0,02 EUR) 3. Special support in order to make relief the consequences of fast decreasing power prices after deregulation 0,09 SEK (0,01 EUR) 4. Right to connect a small scale power station to the electric grid (small scale < 1,5 MW) 5. Special pay for decreasing losses in the electric grid up to 0,02 SEK (0,002 EUR). |
The support system has been working the way it was intended to develop an annual production of 0,5 TWh electric power from wind- but it has not given the long time security, which is needed, to interest investors and creditors. For example, todays support system finishes 31 December 2002 with only promises of a new one, which nobody knows how it will be designed. A recent study initiated by government shall investigate how the support system can be replaced of a green certificate system 1 Jan 2003. |
|
SP |
No differences with onshore farms: The strategy of the Spanish government is summarized in the new "Program for Promotion of Renewable Energies" (Reference 1, see appendix) approved by the Parliament to maintain the situation of the Royal Law 2818/1998-23 December 1998, about the Electrical Special Regime for Renewable Energy Plants connected to the grid. That law fixed the price and the bonus of the electricity produced by renewable energy plants, price that will be up-dated every year by the Spanish Ministry of Energy and Industry according to the annual variation of the market price. All owners of installations using renewable energies as primary source, with an installed power equal to or lower than 50 MW, have two options, one is a fixed priced for the kWh generated, and a second option is a variable price, calculated from the average price of the market-pool, plus a bonus per kWh produced. In 2000 the bonus added to the base price was 0,0288 Euro/kWh and the fixed price was 0,0626 Euro/kWh. |
N/A |
|
UK |
Primary market is likely to be Licensed UK Electricity Suppliers to fulfil their Renewable Energy Obligation commitments. Revenue will consist of: Energy sale to supplier on a negative demand contract or through amalgamation mechanism on NETA power exchanges. Sale of Renewables Obligation Certificates (ROCs). Sale of Climate Change Levy Exemption Certificates Use of system charge or benefit Net value of the above expected to be around GBP 0.05/kWh (EUR 0.08/kWh). Internationally traded Green Certificates may also play a role.
Capital grant budget recently announced of 39m from DTI plus 50m from National Lottery for offshore wind power (mainly) and biomass. Distribution method under discussion. |
N/A |
Regarding national planning rules and regulations it can be concluded that in many countries the legal framework has not been fully clarified yet, which is a barrier for future development of large-scale offshore wind energy. As suggested in [xxxiii], a one-desk policy for all necessary licenses would be beneficial in this regard.
Regarding national incentives, such as market support, history shows that feed-in tariffs have been used onshore in Denmark, Germany and Spain, Europes top-three on-shore markets. After the feed-in-tariff in Denmark was announced to be replaced by a still not functioning green certificate market, the development of onshore projects has virtually stopped.
The conclusions, based on this example, is not necessarily that only feed-in-tariffs can secure future development of wind energy, including offshore, but it can be concluded that the countries within EU need to create long-term market support mechanisms that are sufficient and secure enough to attract investors and developers.
The EC Court of Justice decision regarding the feed-in-tariff system in Germany (Stromeinspeisungsgesetz) indicates that feed-in-tariffs are not in compliance with internal market rules, thereby securing this market support mechanism a future within the EU.