By 2023 the Dutch government intends to generate 4,450MW from wind parks at sea. As the current capacity is about 1,500MW, several wind farms will have to be built in the North Sea. A great deal of attention is being paid to public law aspects of the construction and control of offshore wind farms. Property law aspects remain somewhat neglected. Who is the owner of wind turbines at sea? This article deals with entitlement to offshore wind farms.
Legal zones in the North Sea
The location of an offshore wind farm impacts its legal status. The North Sea is divided into various maritime zones, each with its own legal regime. This legal zoning is based on international law as contained in the United Nations Convention on the Law of the Sea (UNCLOS). The following maritime zones are of importance for wind farms: the territorial sea and the exclusive economic zone (EEZ).
The sovereignty of the Netherlands extends over the seabed and subsoil of the territorial sea, namely up to 12 nm (22.22 km) measured from the low-water mark. In the territorial sea, the Dutch Civil Code applies. This determines that the seabed of the territorial sea belongs to the Dutch state.
Exclusive Economic Zone
The EEZ is the zone that starts at the border of the territorial sea. In connection with the proximity of other North Sea states, the EEZ does not extend to the maximum 200 nm from the low-water mark allowed under UNCLOS, but the external border is at the outer limit of the continental shelf part allocated to the Netherlands. This external border was established in boundary delimitation treaties with Belgium, Germany and the UK.
In the EEZ, the Dutch Civil Code does not apply. Under UNCLOS, insofar as is relevant to offshore wind farms, in the EEZ the Netherlands has:
- sovereign rights (a) for the purpose of exploiting and managing the seabed and its subsoil and (b) with regard to other activities for economic exploitation such as the generation of wind energy;
- jurisdiction with regard to the construction and use of installations and facilities; and
- the exclusive right to build and to authorize and arrange construction, activities and use of installations and facilities such as wind farms for economic purposes.
The two pictures show the territorial sea, the EEZ, the existing wind farms and the designated locations. They also show where the Dutch Civil Code and the Law of the Sea Convention apply.
Ownership in the offshore setting
This section discusses ownership of offshore wind turbines. In this case, a distinction is made between the territorial sea and the EEZ.
The Dutch Civil Code applies in the territorial sea. Here, the same rules apply as for wind turbines on land. Under the Dutch Civil Code, ownership of the land includes structures with permanent foundations (vertical accession). A wind turbine is a structure with permanent foundations. The seabed of the territorial sea is owned by the state. This means that a wind turbine built in the territorial sea is owned by the state. By establishing a right of superficies, under the law of property the state can grant entitlement to the wind turbines to a third party.
Exclusive Economic Zone
The Dutch Civil Code does not apply in the EEZ. The rule that the seabed of the sea belongs to the Dutch state does not apply. Neither do civil law definitions in the Dutch Civil Code such as moveable property, immoveable property, specification, accession and registered property apply in the EEZ. In the EEZ the rules of UNCLOS apply. UNCLOS does not govern who is the owner of an installation or facility in the EEZ. Therefore it is not possible to designate an owner based on UNCLOS. As indicated, UNCLOS does grant the Netherlands (i) sovereign rights for the purpose of activities for generating wind energy and (ii) the exclusive right to authorize use of wind farms. This authorization is the legal basis for the operator's entitlement to use wind turbines in the EEZ.
The sovereign rights and authorization are not property rights within the meaning of the Dutch Civil Code. The question arises: on the basis of which rules can it be determined who the owner is of wind turbines in the EEZ?
At the time that the wind turbine's components are in the Netherlands, before they are shipped to the location in the EEZ where the wind turbine is being built, these components are moveable property. If the wind turbines are assembled on the mainland or in the territorial sea, ownership of the wind turbine is acceded through ownership of the land. The owner of the components then loses their property right. Under Dutch Private International Law it can be argued that the property right of the components continues to exist if the wind turbine is assembled in the EEZ. This is explained below.
The components are shipped to a legal no man's land, where the Dutch Civil Code does not apply. Neither do civil law definitions in the Dutch Civil Code, such as moveable property, immoveable property, specification, accession and registered property, apply in the EEZ, as noted previously. If an object is transferred from one state to another state, under Dutch Private International Law, rights obtained or established under the law of property remain vested in it (Section 130, Book 10 of the Dutch Civil Code). If a component for a wind turbine is transferred from the Netherlands to another state, this means that under Dutch Private International Law, the property right remains vested in the component. If the components are shipped to the EEZ, strictly speaking Section 130 of Book 10 of the Dutch Civil Code does not apply, as the components are not brought to another state, but to an area that does not belong to the territory of a state.
If a Dutch court should assess who the owner is of the constituent components of the wind turbine, it is the author's opinion that - in the absence of any other points of reference - a natural consequence is to analogically apply Section 130 of Book 10 of the Dutch Civil Code.
As there is no regulation in the EEZ from which it is evident that the property right ceases to exist if the components are assembled (which constitutes the wind turbine), it must be assumed that the property right of the components continues to exist. Therefore, the owner of the components is the owner of the wind turbine.
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.