Board of Appeal Revokes Permit for Hvammsvirkjun Hydropower Plant Skip to content
Photo: Þjórsá.

Board of Appeal Revokes Permit for Hvammsvirkjun Hydropower Plant

The Environmental and Natural Resources Board of Appeal has revoked the permit of the Hvammsvirkjun hydropower plant, RÚV reports. Landsvirkjun, Iceland’s National Power Company, has called the ruling “a surprise.” The Board of Appeal finds that the National Energy Authority (Orkustofnun) has failed to fully comply with the law.

Permit revoked

On Wednesday, the local council of the Rangarþing ytra municipality in South Iceland delayed the issuance of a construction permit for the Hvammsvirkjun hydropower plant on the Þjórsá river. The decision was made in order to buy time for the council to consider new information concerning the project’s potential environmental impacts.

The proposed Hvammsvirkjun hydropower plant would have an estimated capacity of around 95 MW and would create a lagoon with a surface area of 4 square kilometres [1.5 square miles].

Yesterday, RÚV reported that the Environmental and Natural Resources Board of Appeal had decided to revoke the permit that the National Energy Authority (Orkustofnun) had issued for the Hvammsvirkjun hydropower plant. The revocation came a day after the local council of the Skeiða-og Gnúpverjahreppur municipality agreed to issue a construction permit for the hydropower plant.

Landsvirkjun’s application is still valid, although the power company must now decide whether the application will be renewed in light of the ruling. It took the National Energy Authority 19 months to process the application for the hydropower plant permit, which has now been revoked.

Failed to follow the Water Council’s guidelines

As noted by RÚV, the Board of Appeal received a total of nine appeals regarding the issuance of the power plant permit. Landsvirkjun demanded that the legal effects of the contested decision be postponed – but that appeal was rejected. Landsvirkjun had previously announced that preparations for the project would begin in July of this year and that it expected the construction of the power plant itself would start in April next year.

The ruling was published on the website of the Board of Appeal yesterday afternoon. According to RÚV, the Board of Appeal emphasises that the National Energy Authority (Orkustofnun) had not followed the guidelines of the Water Council when preparing to issue a permit to the hydropower plant. The Board of Appeal further noted that the National Energy Authority was tasked with ensuring that issuing of the licence was in accordance with the policy on water protection that was set out in the Icelandic River Basin Management Plan.

The Board of Appeal believes that there was a reason for a much closer examination in light of the scale of the project and the environmental effects it entails. A lack of data or strategic planning cannot absolve the government of its legal obligations in such a decisive way.

Finally, the Board of Appeal finds that it would have been normal for the National Energy Authority to seek formal instructions from the Environmental Agency, which is in charge of administration in the field of water protection.

“Bad news for Icelandic society”

In an announcement from Landsvirkjun, the ruling is described as “a surprise,” as Landsvirkjun maintains that it had followed the National Energy Authority’s guidelines in its application for the permit. Landsvirkjun is now considering what the ruling entails and is awaiting instructions from the National Energy Authority, RÚV reports. This will possibly delay the project, but – as previously noted – preparations for the construction were planned to start in July this year with construction for the power station itself assumed to begin in April of next year.

“This decision may delay construction. This would be bad news for Icelandic society, which is aiming for an energy transition; a lack of renewable energy is likely over the coming years,” the announcement reads.

Energy-intensive industries are largest consumers

As noted by IR yesterday, the Hvammsvirkjun plant would have an estimated capacity of 95 MW. For comparison, Iceland’s largest hydropower plants are the Kárahnjúkar and Búrfell plants, with respective capacities of 690 KW and 270 KW. Both were built to provide power to aluminium smelters. Hellisheiði Power Station is Iceland’s largest geothermal power plant, with a capacity of 303 MW.

Snæbjörn Guðmundsson of the nature conservation organisation Náttúrugrið has expressed concern that the proposed Hvammsvirkjun hydropower plant would be used towards Bitcoin mining, a growing industry in Iceland that is energy-intensive but contributes relatively little to the country’s GDP. The National Power Company has stated that it would not build power plants for the express purpose of providing energy to Bitcoin mining companies.

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