Equinor's Hywind Tampen project – set to become the biggest floating wind farm in the world – marks the first foray into offshore wind production in Norway. There are high hopes for the potential of this industry in Norway, which has a vast continental shelf and territorial waters and considerable expertise in traditional offshore energy production.
That said, a number of issues must be resolved in order for offshore wind production to become a commercially viable industry in Norway. Central in this regard is the existence of a legal framework that enables projects to attract commercial financiers. For such financiers to be willing to provide capital, adequate security must be available.
Under the current regulatory landscape, lenders may access general corporate security such as assignments of monetary claims and insurances, account pledges and share pledges. However, it is doubtful whether valid security may be agreed over wind turbines themselves and the production licences required to use them.
For floating turbines, a feasible system may already be in place through the Maritime Code, which allows most floating devices to be registered in the Ship Register. Lenders may therefore be able to record what is essentially a ship mortgage over a Norwegian 'flagged' turbine. However, as registration of unspecified floating devices requires consent from the Norwegian Maritime Authority on a case-by-case basis, this solution may not yet be suitable for commercial purposes.
In the case of fixed turbines and production licences, it seems that new legislation is required to enable valid security arrangements. A system akin to the one established under the Petroleum Act – whereby security may be recorded over development licences, with associated fixed production equipment, in a separate register (the Petroleum Register) – could be a practical solution.
The question of security therefore requires further clarification – and likely new legislation – before commercial financiers will enter the fray. However, security has been noted as one of the issues on the agenda as the Norwegian Ministry for Oil explores new regulations under the Offshore Renewable Energy Act.
An earlier version of this article was first published (in Norwegian) in Dagens Næringsliv.
