The Government of
On
Crown Land Fees:
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Annual charge of 3.5% of the market value of reserved lands. Payments begin on award of the exclusive right to apply for an interest in the land.
- Annual charge of 7% of the market value of leased lands. Payments begin on issuance of a Crown lease.
- Tiered cost recovery royalties based on the value of the water used.
- Tier 1: Rate of 10% applied after 1x cost recovery.
- Tier 2: Rate of 20% applied after 2x cost recovery.
- Tier 3: Rate of 25% applied after 3x cost recovery.
Proponents may enter into agreements with Government to modify the royalties payable, similar to offshore oil and gas projects.
On
March 23, 2023 , the Government received 19 bids for wind energy projects. Bids will be evaluated in two phases: Phase 1 - Minimum Criteria, and Phase 2 - Review.Phase 1 will ensure the bids meet the minimum criteria required of a proponent to perform a wind turbine project - this will include consideration of project experience, in construction and operation, and financing.
Proponents who meet the minimum criteria will advance to Phase 2. Phase 2, set for April, will rank the proponents on a weighted evaluation system. The heaviest Phase 2 criteria that proponents will be scored on, all of equal weight (15%), includes electricity considerations and grid impacts, benefits to Government, proponent details, project details, and financing. Government have issued Guidelines: Crown Lands Call for Bids for Wind Energy Projects that set out the evaluation process in further detail.
Successful proponents will be awarded an application recommendation letter from the
Department of Industry ,Energy, and Technology . This isn't a grant of the Crown land - it is an exclusive right to develop the proponent's project and to formally apply for an interest in the land. Environmental Assessment registration is not required during the call for land bids phase; however, prior to final award of Crown land, an environmental assessment will be required for projects over the relatively nominal capacity of 1 megawatt.Government seeks to balance compensation for its natural resources and the investment of successful proponents. Governments in other jurisdictions, such as
Norway , have recently cited the increased cost effectiveness of onshore wind installations and persistently high energy prices as cause to increase tax for onshore wind developments. Industry members have pushed back, stating wind farms still carry high investment costs. Time and market conditions will tell ifNewfoundland andLabrador's framework strikes a balance that can make it count for both government and industry.The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
Wind Electricity Tax:
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A tax of
Water Use Fees and Royalties:
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Water electrolysis, the process of using the electricity to produce hydrogen, requires large amounts of water. An annual fee of
Mr
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