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Grants for district heating

Instructions for district heating grants

If it is decided in the budget to provide grants for the establishment of new district heating systems or for the expansion of existing ones, the funds shall be allocated for the following factors:

1. For new district heating systems that commenced operation in 1998 or later.

2. For district heating systems that have expanded their distribution systems in 1998 or later in order to connect residential buildings that benefit from electricity heating subsidies.

3. For operational district heating systems that hold a private license for distributing hot water and expand their distribution areas by taking over district heating systems that lack such a license, distributing hot water through their distribution networks to at least 5 separate households, and facing cost-intensive measures for renewing the distribution network.

The basic grant for each district heating system/user can amount to a total of up to 12 years' estimated subsidies for electricity or oil for heating, based on the average heating consumption for the next five years.

Despite the general rule that the basic grant is based on a 12-year period, the grant for district heating systems can amount to up to 16 years' estimated subsidies if the following conditions are met:

1. The relevant district heating system is in majority ownership of the state, municipalities, and/or companies that are entirely owned by these entities.

2. The relevant district heating system has the backing of the participating municipality and must demonstrate the ability to undertake its commitments with a 16-year operational plan.

3. The relevant district heating system has obtained a private license to operate the district heating system according to energy laws, No. 58/1967, and fulfills the conditions of Article 2 of Paragraph 32 of those laws, stating that breeding and plans are technically correct, the district heating system is economically viable, meets the heat demand of the area, and ensures normal and uninterrupted operation, as conditions allow.

It is ensured that the grant is only allocated for the purpose of providing the owner(s) of the district heating system with a minimum return on investment.

How to to apply

  • Fill out an application online through the Service Portal and submit it digitally to the National Energy Authority.
  • Fill out an application on paper and send it via mail to the Akureyri branch office of the National Energy Authority at: Rangárvellir, 603 Akureyri. The National Energy Authority will send a paper application to those who ask for it.
  • With the application, a standardized Excel document must be filled out and attached.