Offshore Wind Worldwide Regulatory Framework in Selected Countries Offshore Wind Worldwide Regulatory Framework in Selected Countries 1st Edition February 2020 Contributing editor: Dr Christian Knütel Partner, Hogan Lovells Hamburg Hogan Lovells International LLP Alstertor 21 20095 Hamburg T +49 40 419 93 0 4 Hogan Lovells Foreword The World Forum Offshore Wind (WFO) is of offshore wind farms across Europe has delighted to have co-edited this handbook proven the technology’s maturity. This was together with our WFO member Hogan impressively demonstrated by the first Lovells. Given the offshore wind industry’s completion of an offshore wind farm’s life global expansion over the past years, this cycle when the Danish Vindeby project was publication is highly relevant to all offshore decommissioned in 2017 after 26 years of wind market participants. While only ten successful offshore operation. years ago, offshore wind was a niche industry limited to a few European countries, we have The global support for offshore wind far since then witnessed the global breakthrough beyond its European core markets clearly of offshore wind as an essential technology illustrates the trust that governments from for electricity generation in order to reduce around the world have in offshore wind as a global CO2 emissions. This successful source of clean electricity generation. Today development over the past decade has been offshore wind turbines are up and running in driven by three major factors: cost countries across Asia, North America and reductions, technical maturity and global Europe. New markets such as South Korea, support. Vietnam, India, Australia or Brazil are taking concrete steps to introduce regulations for The cost reductions for offshore wind seen in the development of domestic commercial- 2017, 2018 and 2019 have been truly scale offshore wind projects. In addition, spectacular. Auctions for offshore wind technological advancements such as the farms in the UK, Germany, The Netherlands advent of floating foundations for offshore and Denmark yielded results unimaginable wind farms create further spectacular growth only five years ago. In 2014, The Economist opportunities as they open up new “deep- still considered offshore wind energy water”-markets such as California, Spain, “staggeringly expensive” and “rather Norway or Japan. dubious”. However, by 2017 it had changed its opinion and acknowledged that offshore While this global expansion is excellent news wind had experienced a “stunning drop” in for the offshore wind industry, it makes it costs and was now an “adolescent industry”. almost impossible even for the most The killer cost argument against offshore knowledgeable offshore wind experts to keep wind energy had finally disappeared. track of all the regulatory developments and changes in the various markets around the The technical reliability of offshore wind world. This is exactly why this farms is also unquestioned by now. A comprehensive overview of regulatory successful operational track record of dozens frameworks for the world’s most relevant Offshore Wind Worldwide 2020 5 offshore wind markets is so important and delivers a great benefit to the entire offshore wind community. Serving as a reference point, this handbook which will be regularly updated allows market participants to quickly gain a thorough and clear understanding of different regulatory frameworks for offshore wind markets around the world. Fully understanding the regulatory frameworks of new and existing offshore wind markets is at the core of every investment decision. This new handbook provides this regulatory clarity and therefore greatly contributes to the continued global success of offshore wind energy. Gunnar Herzig Managing Director, World Forum Offshore Wind (WFO) 6 Hogan Lovells Editor’s Preface The upward trend of the worldwide offshore This handbook will be updated and industry is continuing. The year 2020 will improved on a annual basis, making it a mark a further high of the contribution of companion for the years to come and a offshore wind to the overall energy mix. At first-class reference for a global overview of least if we believe the predictions of the the determining conditions of the offshore European Wind Association and the industry. It is the result of a truly Organisation for Economic Co-operation and international cooperation. Numerous Development, the capacity will increase by lawyers from various Hogan Lovells offices 75 GW globally and the European Union will on three continents have contributed. They contribute 40 GW to it. We can expect the were joined by lawyers from many friendly market volume to increase by USD 230 law firms all over the globe. With their billion by the end of this decade. And not excellent industry knowledge and work, they only economically, but also technically, the have ensured that this handbook can provide next few years will offer great potential: The first-hand insight into the national legal development of floating offshore wind systems. I would like to take this opportunity turbines will certainly surprise us. to thank all contributors most sincerely for their help in making this handbook a success. The offshore wind market offers tremendous opportunities. The resource “wind” is On a final note: A handbook like this one waiting to be exploited much further. Reason must necessarily be limited to the basics. But enough to deal with the legal framework in all our authors will find a sympathetic ear for the various offshore wind jurisdictions. In you and are happy to discuss any questions the absence of a globally standardised policy, and comments you might have. Please do not the international offshore wind market is hesitate to contact them. You will find their characterised by a multitude of different details at the end of each section. The same regulatory regimes. applies to us, of course. If you have any criticism, comments or suggestions for A thorough understanding of these regimes future editions, please let us know. helps to prepare the ground for any market entry. And that is where this handbook is With windy wishes supposed to be of assistance. It intends to Yours provide you with a deeper comprehension of the regulatory risks and chances with which specific markets will inevitably confront you. And it will allow you to compare the different Dr Christian Knütel national regimes. Partner, Hogan Lovells [email protected] Offshore Wind Worldwide 2020 7 8 Hogan Lovells Contents Belgium 10 Republic of Korea 104 China 18 Netherlands 116 Denmark 36 Poland 124 France 44 Taiwan 136 Germany 64 United Kingdom 150 India 76 United States 166 Japan 90 Vietnam 180 WFO 191 Offshore Wind Worldwide 2020 9 Contents 10 Hogan Lovells Belgium Tom Geudens, Caroline Hoste and Jens Debièvre Lydian Offshore Wind Worldwide 2020 11 I. State and future of Offshore Wind Furthermore, a new federal law has been Projects adopted in 2019 on the organisation of a competitive bidding procedure for the A. Current state of offshore construction and operation of offshore wind development and projects renewable electricity production Belgium is currently a world leader in the installations to establish, in line with EU law offshore wind industry with six operational obligations, general principles for the wind farms with a 1,556 MW production competitive bidding procedures for awarding capacity. domain concessions to future projects of offshore electricity production. This federal In 2019, these wind farms have produced 4.6 law has set out the framework for the new TWh of electricity, which represents about 6 offshore wind zone but the new tendering % of Belgium’s total electricity consumption. procedure will still have to be adopted by Royal Decree. Given the current political During the second half of 2020, two new situation, i.e. the lack of the composition of a wind farms, which are currently under new federal government, there is no clear construction, will begin to produce energy, view on the timing thereof and new which will bring the total production tendering procedures are expected not to capacity to 2,262 MW. This will enable occur before the end of 2023. There is also a Belgium to produce an average of 8 TWh, delay by the fact that the Belgian electricity approximately 10 % of Belgium’s total grid is not yet ready for new offshore wind electricity demand. capacity. Currently, all tender procedures in the first B. Expectations of future area of the Belgian North Sea (often referred developments in the market until to as the ‘first offshore wind phase’) are 2030 and beyond closed, but with the new maritime spatial By the end of 2020 the first offshore wind plan for the period 2020-2026, the Belgian phase should be completed, bringing the minister competent for the North Sea has total production capacity to approximately established the framework for an additional 2,300 MW. wind zone of 281 km² close to the French border, in addition to the wind zone of 225 With the second offshore wind phase, the km² that already exists close to the border federal government is aiming at adding with the Netherlands. This additional wind another 2,000 MW to the grid. zone intends to add another 2,000 MW (the ‘second offshore wind phase’). The wind developing sector was pushing for completion of this second offshore wind 12 HoganBelgium Lovells phase by 2024 but, given the current II. The Offshore Wind Promotion political situation (delay on the composition system of the new government delays the adoption of the royal decree regarding the new A. Regulatory framework tendering procedure) and the fact that the Belgium is a federal state. The power to enact Belgian electricity grid is not yet ready for legal binding decisions is not the exclusive new offshore wind capacity, tendering of preserve of the Belgian Federal Government the new domain concessions are not and the Federal Parliament.