Global Green Guide: Green is the new black

Amy Ulliott, The Legal 500's Caribbean and Nordics editor, discusses how Norway is standing out as a leader among nations in its dedication to renewable energy and sustainability.

The Norwegian continental shelf and its production of petroleum and gas resources has contributed substantially to Norway’s economic success, pushing the country to the forefront of oil and gas exportation and counting for a notable proportion of the country’s GDP. Norway currently exports roughly 70% of its oil production to the wider European region (with the combined exportation for oil and gas equating to 50% of the country’s total value of exported goods) and sits in the top 10 countries for crude oil exports by dollar value.

However, Norway also stands out as a leader among nations in its dedication to renewable energy and sustainability. In a recent survey conducted by energy tariff comparison site Utility Bidder, Norway was ranked as the top user of renewable energy, with the vast majority of the country’s energy coming from green sources. For Norway, the primary source of sustainable energy is hydropower plants, and the country has utilised its extensive coastline and steep valleys to generate hydroelectricity since the early 1900s.

Aksel Tannum | Head of renewable energy | Haavind

Offshore and onshore wind projects are also increasingly common across the Norwegian landscape and, alongside carbon capture and storage (CCS) projects, are receiving increased investments from both the Norwegian government and the private sector; in 2021, the Norwegian government announced the first licensing round for the construction of offshore wind farms in two areas of the North Sea.

For Norwegian law firms, this dichotomy has forced notable changes in the approach taken to energy work, but these adaptations are not as antagonistic or as new as one might expect.

‘Norway’s ambition to be an international leader in combating climate changes could, in certain respects, be argued to run counter to our status as one of the world’s significant oil and gas exporters’, say state energy expert June Snemyr and managing associate Ole Christoffer Ellingsen at Thommessen. ‘The move may have created difficulties for some law firms which have been primarily assisted oil and gas and oil service clients, but not for us. We have always had a designated team for renewable energy and infrastructure, with close connections to the renewable energy industry’.

Aksel Tannum, who is head of the renewable energy practice at Haavind, agrees: ‘Haavind has a long tradition of working for the power industry in Norway, which has been based on hydropower and wind power in more recent years. This legacy provides us with relevance in the market and insight into, and experience with, a complex and heavily regulated sector’.

Peter Aall Simonsen | Head of infrastructure and renewable energy | Simonsen Vogt Wiig

This long-standing expertise has allowed Norwegian firms to place themselves well in response to the general societal shift at a national and international level regarding climate change and sustainability, a move which has seen key businesses in the wider energy market take action.

Notable Nordic companies (and clients of the leading firms) have made substantial moves away from the oil and gas sector in recent years, framing their businesses in a more eco-friendly light. DONG Energy (which stood for Danish Oil and Natural Gas) rebranded in 2017 to Ørsted and dedicated itself to green energy solutions, while Norwegian company Statoil followed suit in 2018, changing its name to Equinor and investing heavily in clean energy projects.

With long-standing relationships with many of these changing businesses, firms are able to leverage the practical experience of their established oil and gas departments when assisting clients on clean energy projects.

‘Traditionally, Simonsen Vogt Wiig’s practice (like that of many other long-standing firms) has been geared towards international shipping, transportation, and oil and gas – some of Norway’s historically most important exports’, states Peter Aall Simonsen, who leads the firm’s infrastructure and renewable energy department. ‘Our experience in working with these industries has given us considerable expertise in international infrastructure investments and project financings generally. Combined with in-depth knowledge of the domestic regulatory framework, this makes us a valuable partner for developers and investors within all sectors of the new renewables landscape’.

Ole Christoffer Ellingsen | Managing associate | Thommessen

Notable examples of this energy project expertise bearing fruit include Simonsen Vogt Wiig’s recent work advising Biojet on the development of pioneering technology for the production of organic biofuels; Haavind’s substantial involvement in new power production mandates encompassing wind, hydro and grid projects, including the largest onshore wind power projects in Norway – the Fosen and the Øyfjellet wind farms; and Thommessen’s work regarding the licensing, development and operation of onshore wind power facilities, as well as advising on the merger between Lyse Produksjon’s hydropower business and Norsk Hydro’s Røldal-Suldal power plants to create one of the largest hydropower producers in Norway.

Beyond assisting clients directly, firms have also played a key role in the regulatory shift in the wider legal framework across Norway.

As Tannum comments, ‘While we have assisted major players in the market with making the transition from oil and gas activity to renewable energy sources, we have also aided the decision makers to set up a viable legal framework, especially within the offshore and hydrogen arenas’.

Snemyr and Ellingson continue, ‘Law firms’ expertise in renewable energy law is an important source for the authorities, and an important factor for the development of a legal framework that facilitates investments in renewable energy or sustainability’.

June Snemyr | State energy expert

Similarly, beyond billable work, firms in the market have also taken up the green gauntlet directly and adapted their own internal processes for the sustainability movement. Haavind has set its sights on being carbon neutral by the end of 2022, while Thommessen has created the freely accessible Sustainability Database, a tool which provides clients and others with analysed and summarised information both on hard law and soft law developments in the field of sustainability, as well as establishing ThommessenZero, an internal team aimed at making the firm more environmentally sustainable.

So, what does the future hold? For the team at Thommessen, ‘We consider the Norwegian energy and industrial market to be an important part of the solution to climate change related challenges. Both the existing energy industry and new innovative companies must contribute if Norway is to continue to assert itself as an important energy producing nation in the future. Existing energy companies have valuable expertise that is crucial for the success of the transition to a sustainable low-emission society’.

However, the journey ahead may not be entirely smooth sailing for the green movement. Simonsen proposes, ‘While we believe the market will continue to grow, the next few years will likely also see a significant number of poorly funded and/or less viable projects, which will not last. We also believe the market going forward will be dominated by large industrial players, as deep pockets might be necessary to fund many early projects, especially within (for the time being) less bankable pioneer industries’.

To sum up, as Tannum states: ‘We have had a substantial amount of projects and transactions for many years now, and with traditional oil and gas players turning to new sources within renewables, we see no signs of this sector cooling down’.


Author

Amy Ulliott

Amy Ulliott is The Legal 500 Caribbean and Nordics editor