On December 19th, the Ministry of Energy announced the introduction of maturity assessments for projects seeking to reserve grid capacity or a place in the capacity queue. Furthermore, it will be possible to withdraw reservations or queue positions for projects that cannot demonstrate sufficient progress and thus do not substantiate their need for capacity. The amendments of the Regulation on grid regulation and the energy market (NEM) will come into effect on January 1, 2025.
Background and Current Law
Electrification and the transition to a green economy have led to a significant increase in the demand for access to the power grid. In several parts of Norway, capacity is maxed out, and increasing the capacity is a time- and resource-intensive process.
Grid companies are obligated to ensure market access for all who request grid services under objective and non-discriminatory conditions, cf. NEM § 4-6, first paragraph. The right to market access applies both to requests for increased capacity and new connections.
Currently, grid companies operate under the principle of "first come, first served." This means that entities who have applied for grid connection first, are given priority. A challenge with the current regulation is that projects can alter their scope, geographical location, or timeline during the process. Consequently, entities in the queue can create market barriers for more realistic projects that are further back in the queue. The new regulation aims to facilitate better resource utilization and ensure that realistic and implementable projects are prioritized.
What does the amendment entail?
The amendment entails that all connection requests over 1 MW must undergo a maturity assessment conducted by the grid companies. Seven minimum criteria have been established that grid companies must follow to assess the project's maturity and feasibility. These criteria are:
- Actual capacity need
- Timing for the use of capacity
- Project description
- Binding progress plan
- Status of relevant permits and agreements
- Location
- Financing plan
The extent and nature of the information required by the grid companies will vary depending on the type and size of the project.
The new regulatory amendment explicitly authorizes grid companies to withdraw all or part of the reserved capacity if a project does not show sufficient progress.
Withdrawal of reserved capacity or queue position may be warranted when a project cannot document sufficient progress to be considered mature. For withdrawal to be warranted, two cumulative conditions must be met:
- There must be significant changes or deviations in the fulfilment of the maturity criteria, and
- These changes or deviations must be due to circumstances for which the actor is responsible or must bear the risk.
The assessment of significance is the most central and will depend on a concrete assessment of each individual case.