Marine licensing and consenting - decommissioning programmes: overview

Background

Marine Directorate – Licensing Operations Team (MD-LOT) performs functions under Chapter 3 of Part 2 of the Energy Act 2004. MD-LOT do this on behalf of the Scottish Ministers to recommend approval or rejection of decommissioning programmes within Scottish inshore or offshore waters.

A decommissioning programme is a detailed document which outlines measures that an operator will take in order to remove a relevant object from the sea. A relevant object is defined as an offshore renewable energy installation or a related electric line. A decommissioning programme should be submitted to MD-LOT and approved by Scottish Ministers prior to the construction of a relevant object. Decommissioning programmes should include the removal of all infrastructure that is part of a relevant object unless compelling evidence (which must be in line with the current guidance) not to remove has been provided.

Section 105 of the Energy Act 2004 gives Scottish Ministers the power to issue a section 105 notice. This notice requires the person responsible (the responsible person) for a relevant object to prepare a decommissioning programme. This notice may only be issued if the Scottish Ministers are satisfied that at least one of the statutory consents required to construct the proposed works has been granted, or has been applied for and is likely to be granted.

Scottish Ministers have the power to require consultations to be carried out on the draft decommissioning programme before it is formally submitted. As a matter of practice, MD-LOT would typically receive the consultation draft in advance and provide comments, based on published Scottish Government policy, prior to the consultation commencing. MD-LOT will direct the recipient to consult with relevant stakeholders, as outlined in the section 105 notice. When the final decommissioning programme is submitted to MD-LOT for approval, details of the consultation process should be provided, including how any consultation responses have been reflected in the final draft.

During the approval process for decommissioning programmes, MD-LOT will commission a financial sustainability assessment to ensure that the provider of a financial security for a decommissioning programme has the capability to do so. MD-LOT will utilise powers available to Scottish Ministers under section 112A of the Energy Act 2004 to require relevant financial information in order to inform this assessment. Read more information for decommissioning offshore renewable energy projects .

Benchmark timescales

No statutory timescales apply for the approval or rejection of a decommissioning programme.

Full approval could take up to 18 months (from the date the section 105 notice is issued) but, as a guide, each stage of approval has the following timescales:

MD-LOT review of draft decommissioning programme (if provided)

There is no set timescale for this review.

MD-LOT will review a draft of the decommissioning programme to give initial feedback, based on published Scottish Government policy, prior to the consultation.

Consultation carried out by responsible person

The timescale for consultation is 30 days.

All stakeholders listed in the Section 105 notice must be consulted. The decommissioning programme should be made publicly available during this period on the responsible person’s website.

MD-LOT consults other government departments and Crown Estate Scotland

The timescale for consultation is 30 days.

MD-LOT aims to carry out this internal consultation at the same time as the responsible person carries out consultation with stakeholders. Meeting this timescale will depend on when all financial information has been submitted.

Responsible person undertakes gap analysis and updates the decommissioning programme following consultation

Timescale is dependent on the responsible person and complexity of representations made during consultation. MD-LOT expects the final submitted decommissioning programme to explain how comments from the consultation have been reflected.

Formal submission of the final decommissioning programme

Deadline is set out in the section 105 notice.

Third-party review

The timescale is three months from the submission date.

Scottish Ministers come to a decision on whether to approve or reject the decommissioning programme

No set timescale for this stage.

Some contingent liabilities for projects may require notification to or approval of the Scottish Parliament’s Finance and Public Administration Committee if the financial liabilities for the project exceed the thresholds set out in the Scottish Public Finance Manual but there is no set timescale for this process to take place.

Decommissioning programme reviews

The Energy Act 2004 requires Scottish Ministers to review approved decommissioning programmes from time to time. For projects proposed for 15 years or more, the following review points should be assumed as standard:

Within one year of completion of construction

Post-construction report must be provided to MD-LOT, which should outline the following:

• reports

• studies
• summaries of issues raised during construction which may impact on the eventual decommissioning methods and costs

12 to 18 months before first security provision is due

To identify any changes in assumptions on costs and risks where these might affect the size or timings of financial securities.

From payment of first security onward on an annual basis

The responsible person should review their decommissioning programme to make sure the financial security provision is on track to meet the expected costs of decommissioning.

Any revisions to a decommissioning programme resulting from changes in costs, securities or environmental issues must be submitted to MD-LOT for approval.

3 years in advance of decommissioning

The responsible person should start consultation on the environmental impact assessment (EIA) (if the EIA threshold is met) that will inform the actual decommissioning.

2 years in advance of decommissioning

A final and comprehensive review of the decommissioning programme should be conducted (which as a matter of practice should be catered for in the agreed decommissioning programme). During this period the operator should consider whether they would require a separate marine licence to carry out the decommissioning works on the relevant object.

Review periods for shorter term projects will be considered on a case-by-case basis. However, for all projects exceeding 12 months, Scottish Ministers would expect a report/summary of issues discovered during construction which might impact on the decommissioning (this should be provided within six months of completion of construction for Scottish Ministers to review), and a review prior to the actual decommissioning of the installation, to finalise the decommissioning measures envisaged.

For all projects, Scottish Ministers reserve the right to require reviews and if necessary modify programmes if significant unexpected events occur (this list is not exhaustive but examples include: changes to the timings of financial securities in the event of a significant failure in performance of the infrastructure, a change in ownership or a significant change in the financial position of the company).

Relevant publications

Offshore renewable energy: decommissioning guidance for Scottish waters

Relevant legislation

The Energy Act 2004