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Offshore Wind Journal

Offshore Wind Journal

Red tape risk needs addressing at the outset

Mon 13 May 2019 by David Foxwell

Red tape risk needs addressing at the outset

David Foxwell reflects on the need to streamline regulatory process for offshore wind

Here is an interesting fact from a recent report by Forum Energii, a respected think tank in Poland. It could take 14 years to complete the preparatory work and develop an offshore windfarm in the country – not that it has offshore windfarms yet, but it could have around 10 GW by 2040.

That is an insanely long period of time and as Forum Energii highlighted in the report, Offshore energy: downwind or upwind, the authorities in Poland urgently need to find a way to accelerate the process of obtaining permits for projects. Legislation is needed to streamline that process.

Fortunately, legislation is being developed by the Polish Government that will address the issue, but Poland is far from being alone in its inability to efficiently handle environmental and permitting issues in offshore wind projects.

Just look at France, for example, where Round 1 and 2 bottom-fixed projects were held up for years and a streamlined process for approval has only recently been addressed.

If the right framework is not in place, investors can get cold feet, the market moves on, tariffs granted to projects years ago quickly become outdated and offshore wind suffers reputational damage because prices for unbuilt projects appear sky high.

Technology also moves on very quickly during the time that projects are held up by red tape, and the pace at which technology is advancing in offshore wind is especially fast.

As a report from law firm White Case highlighted, national and local governments around the world need to create regulatory and commercial environments to encourage developers, lenders and investors to build, finance and invest in offshore wind energy. But for the time being, all of them have something in common – existing processes take far too long.

As White Case noted, renewable energy generated by offshore wind power is consistent with nations’ climate change commitments under the Paris Agreement to reduce greenhouse gas emissions. Countries have targets to meet but if the regulatory framework is not ready projects risk being held up. They also risk losing or slowing down the other benefits associated with offshore wind, including job creation, boosting regional economies and mitigating the effects of climate change globally.

As the law firm also noted, the complexity, sophistication and duration of the environmental impact assessment process varies between jurisdictions and must be carefully evaluated by potential developers and investors. Project proponents also need to be mindful that in most jurisdictions, although to varying degrees, the environmental and social impact assessment is subject to public scrutiny and comment and can also be vulnerable to legal challenges. If the burden or potential burden of these challenges seem too onerous in some countries as the global market grows, developers will go elsewhere.

The regulatory and environmental framework for offshore wind will vary from country to country. That is a given. But what is essential in every country embarking on offshore wind is that the process is streamlined in advance. France got it wrong and the domestic offshore wind industry suffered as a result. Poland is taking steps to avoid the kind of problems France encountered. If it does so its industry and supply chain will benefit once appropriate legislation and processes are in place.

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