Denmark commits to closer energy cooperation with North Sea countries

Introduction
Main areas of cooperation
Perspective for regional enterprises


Introduction

On June 6 2016 the Danish government joined other North Sea countries (Belgium, France, Germany, Ireland, Luxembourg, the Netherlands, Norway and Sweden) and the European Commission in a common declaration to support further offshore energy development through a detailed programme and structured cooperation between the countries.

The aim of the commitment is to create improved conditions for the development of offshore wind energy, thereby ensuring a sustainable, secure and affordable energy supply in the North Sea region. The declaration also includes an approximation of an internal market for renewables in the region.

The Danish government hopes that the initiative will transform the North Sea region into the Silicon Valley of offshore energy.

Main areas of cooperation

The parties agreed to focus on the following areas:

• maritime spatial planning, which involves:
  • coordinating the planning and development of offshore wind and grid projects beyond national borders, including area mapping;
  • developing a common environmental assessment framework;
  • increasing the availability and interoperability of marine data for planning, impact assessment, licensing and operations;
  • exchanging best practices on site preparation and the handling of unexploded ordinance; and
  • exchanging best practices on permitting procedures and working on a coordinated permit process for concrete sub-regional offshore energy projects;
• the development and regulation of offshore grids and other offshore infrastructure, which involves:
  • improving the coordination of regional and point-to-point grid planning and development;
  • promoting projects with regional benefits and exploring models of cost allocation (ie, compensation), to help generate favourable options for sub-regional cooperation;
  • exploring options for developing hybrid energy projects linking offshore windfarms with interconnectors; and
  • exploring potential synergies with the conventional offshore sector, including operational cooperation and the electrification of platforms;
• a support framework and financing for offshore wind projects, which involves:
  • sharing information on the likely offshore energy infrastructure needs of each country and the phasing of development, thereby providing stability to the private sector regarding the total demand for offshore energy infrastructure in the region;
  • improving the coordination of national support schemes regarding offshore wind energy, design and planning and the tendering process;
  • exploring the possibility of pilot projects and opportunities to establish support schemes and joint tenders, ensuring favourable conditions for all participating countries; and
  • further mobilising investment capital for joint pilot projects through the European Fund for Strategic Investments, the Connecting Europe Facility and institutional investors; and
• uniform standards and technical rules in the offshore wind sector, which involves:
  • harmonising rules concerning aviation markings and lights;
  • harmonising health and safety requirements;
  • aligning crew and vessel requirements;
  • mutually recognising and harmonising certification standards for components in offshore wind projects;
  • exchanging best practices on planning constraints, including line-of-sight requirements;
  • establishing a common approach by establishing facilities for the innovation, testing and demonstration of new technology; and
  • finding a common approach to rules applicable to offshore turbines in territorial waters and exclusive zones.

The declaration provides for a governance and support structure that establishes support groups and a committee of representatives from North Sea countries and the European Commission.

Perspective for regional enterprises

The declaration provides for the significant expansion of offshore wind projects and gigawatt (GW) capacity in the North Sea region and particularly in Denmark.

EU-financed research project Windspeed examined the offshore wind potential of the North Sea region and came to a positive conclusion regarding offshore projects, naming Denmark as the leading country in this regard due to its surplus in capacity for offshore energy.

There is potential to expand the North Sea's existing 7.7 GW capacity in the North Sea to approximately 100 GW by 2030, 25 GW of which could be located in Danish territory. Based on Danish household electricity consumption, the production of an additional 100 GW in power would provide power for approximately 100 million households.

The proposed cooperation is likely to result in economic growth in the region and job creation in regional enterprises in the offshore energy sector.

Strengthened cooperation and the exploitation of Danish offshore resources could lead to an increase in demand for Danish suppliers and facilities, but also for Danish ports, thus consolidating their position as the main entry point to the North Sea.

For further information on this topic please contact Nicolaj Kleist at Bruun & Hjejle by telephone (+45 33 34 50 00) or email (nkl@bruunhjejle.dk). The Bruun & Hjejle website can be accessed at www.bruunhjejle.com.