OR Paying Ölfus to Speed up Project Permit? Skip to content

OR Paying Ölfus to Speed up Project Permit?

By Iceland Review

Reykjavík Energy (OR) has paid Ölfus municipality, south Iceland, ISK 45 million (USD 749,000, EUR 510,000) so that “applications and permits will be handled as quickly as possible,” regarding rights to harness energy on Hellisheidi heath and the Hengilssvaedi region.

According to Fréttabladid, the ISK 45 million could be considered a down payment for the contract, reportedly worth ISK 500 million (USD 8.3 million, EUR 5.7 million), which the Ölfus municipality council accepted April 27, 2006, thereby granting OR the right to harness geothermal energy in the area. The above estimate is taken from that contract.

Bergur Sigurdsson, executive manager for the NGO Landvernd – The Icelandic Environment Association, which is against constructing geothermal power plants in the area, said the wording of the contract can be interpreted such that OR has bought a permit from Ölfus municipality for the project.

“It is important that the committee, which was established to review issues concerning OR [in relation to the Reykjavík Energy Invest-Geysir Green Energy merger debate], will take this matter into consideration,” Sigurdsson said.

Eiríkur Hjálmarsson, OR’s public relations officer, said it is not common practice for a company to cover the entire cost for a municipality to execute a certain project, “but when operations are planned for municipalities that have relatively few inhabitants and call for imported labor, it has not been considered out of the ordinary for the company undertaking those operations to cover some of the cost.”

According to the agreement, OR promises to “cover all costs of potential lawsuits and claims for damages,” and also to establish lighting for Threngslavegur road on Hellisheidi, to construct a new sheep fold and a stable and to contribute ISK 75 million (USD 1.2 million, EUR 851,000) towards forestry. Additionally, OR will cover the cost of establishing a fiber optic cable.

Click here to read more about this debate.

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