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Hydroelectric Power

Instructions for hydroelectric power permit


Data and information gathering

In Sections 5 and 6 of the Electricity Act (65/2003) and Section 4 of Regulation No. 1040/2005, the following provisions are referred to and interpreted in the context provided here. These provisions are considered with regard to the interests that the electricity laws are intended to safeguard, as further elaborated in Annex 1, as well as in light of the aspects that need to be addressed in the issuance of a power generation permit (Annex 2). Various requirements, such as those concerning design and experience of designers, are in part considered based on the interests of third parties (end-users).

Section 4 of the Electricity Act states: Ministerial permits are required to establish and operate electricity plants. [However, such a permit is not required for electricity plants with installed capacity under 1 MW, unless the energy from the power plant is delivered to the distributed grid of distribution utilities or the transmission system. Owners of plants with installed capacity between 30–1,000 kW must provide technical information about the plant to the National Energy Authority. They are also obligated to annually report to the National Energy Authority about the total electricity generation of power plants with installed capacity over 100 kW.]

Starting from August 1, 2008, the National Energy Authority grants power generation permits in accordance with Article 1, Paragraph 4 of the Electricity Act, as stipulated in Article 32 of the same Act.

The following is an overview of the data and information that must accompany an application for a power generation permit. Subsequent to this overview, explanations and references to relevant sections in the Electricity Act are provided, along with further instructions regarding the content of the information.

1. Name of the applicant, their national identification number, residential address, and information about the operational form.

Hydropower license will only be granted to independent legal and taxable entities (Article 5). The explanation clarifies that no requirements are imposed regarding the legal form of the company.

2. Results of studies on the relevant power project costs.

2.1 Runoff Data

The runoff data used, how they were processed, along with the results regarding average, low, and flood flows.


Research that concerns the size of a power project and its operation is of utmost importance. In the case of hydroelectric power plants, for instance, the utilization of information about the water runoff in the relevant waterfall is crucial. It is required to ensure that the best available data is utilized. For small hydropower plants, emphasis is placed on having at least two years of runoff data. It's noteworthy that Norwegians have a bitter experience with power plants due to insufficient information about runoff.

Conditions can be set to ensure safety and reliability in the operation of the power plant (Section 5 of the law). This means that the power plant must be able to provide the energy it is committed to, with adequate reliability. This is to ensure that agreements with buyers are reasonably reliable. However, this provision generally doesn't apply to individual power plants (Appendix 1).

Regarding geothermal power plants' size prerequisites, it is assumed that this has been discussed in relation to the granting of utilization licenses.

2.2 Consultants and Technical Expertise:

It is required that the design is carried out by experienced consultants. The designers and their experience in power plant design must be presented.


The assessment of technical capacity is primarily based on how the preparation and execution are carried out. It is assumed that the execution is based on design at all stages and that design documents are prepared and reviewed by specialists with knowledge and experience in power plant design.

2.3 Design Conditions:


It is considered essential for the applicant to demonstrate that the design of structures and implementation is based on sound geotechnical research, as circumstances demand, in line with safety and environmental considerations (Section 6 of the law). It is crucial to ensure that dams withstand flood loads with specified recurrence intervals. Furthermore, seismic events must be taken into account. In geothermal power plants, the integrity and efficiency of boreholes and steam supply must be maintained, considering conditions such as seismic activity. In the design process, it is important to ensure that the implementation of structures aligns with the description provided by project operators and operational assumptions, as well as the environmental impact assessment results and any imposed conditions.

2.4 Research Regarding Environmental Impact Assessment (Act No. 106/2000):

Always: Dams, other structures, or alterations to watercourses intended to impede and/or regulate water where an area of 3 km² or more will be submerged under water or where the water volume exceeds 10 million m³ are always subject to environmental impact assessment. Sometimes: Proposed activities related to a power plant with a capacity of 200 kW or more require the applicant to notify the Planning Agency and ensure whether an environmental impact assessment is required (see Clause 8 below). This may involve research or site assessments.

3. Description of the Power Plant

3.1 Description of the Power Plant, Its Location, and Layout as Specified in Relevant Drawings (Clause 8), Including Maps and Layouts Illustrating the Configuration of Structures, Key Numerical Information About the Power Plant, and the Delimitation of the Power Plant Area According to Clause 1 on the Content of the License.


Orkustofnun believes that in most cases, maps, layouts, and descriptions of structures that are required for the aforementioned communication with the Planning Agency should suffice to provide a satisfactory description of their location and configuration.

3.2 Key Statistics:

Information is requested about the following aspects when applying for or notifying a power plant that isn't subject to licensing but engages in the transmission system:

  1. Elevation of the Dam (GPS coordinates at the intersection point of the waterfall) and Head (m above sea level).
    Explanation: This refers to the geographical coordinates of the point where the dam intersects with the waterfall and the vertical distance from that point to the sea level.

  2. Type of Dam (Earth dam, Concrete dam, Weir, etc.), Type of Spillway (How does the water overflow?), How is the Overflow?
    Explanation: Specify the type of dam structure (e.g., earth dam, concrete dam) and how the water overflows (e.g., weir). Describe the configuration of the spillway.

  3. Reservoir Above the Dam, Surface Area (km², ha), Mean Volume (Gl, m³).
    Explanation: Provide information about the reservoir created above the dam, including its surface area in square kilometers (km²) or hectares (ha) and its average volume in gigaliters (Gl) or cubic meters (m³).

  4. Elevation of the Power Station Building (Coordinates).
    Explanation: This refers to the geographical coordinates of the power station building's location.

  5. Size of the Water Turbine (hp or kW) or Geothermal Turbine.
    Explanation: Indicate the size of the water turbine in horsepower (hp) or kilowatts (kW) or the size of the geothermal turbine.

  6. Type of Water Turbine (Francis, Pelton, Kaplan) or Steam Turbine.
    Explanation: Specify the type of water turbine (e.g., Francis, Pelton, Kaplan) or indicate if it's a steam turbine.

  7. Size (kW and kVA) and Type of Generator.
    Explanation: Provide information about the generator's size in kilowatts (kW) and kilovolt-amperes (kVA) and indicate its type.

  8. Total (Gross) Fall Head (m).
    Explanation: State the total vertical distance (fall head) from the highest point of the water source to the lowest point at the power plant.

  9. Usable Fall Head (m).
    Explanation: Indicate the vertical distance (fall head) that can be effectively utilized for power generation.

  10. Penstock Details; Length (m), Diameter (mm), Type (Timber, Wood-Plastic Composite, Plastic, etc.).
    Explanation: Provide information about the penstock, including its length in meters (m), diameter in millimeters (mm), and material type (e.g., timber, wood-plastic composite, plastic).

  11. Inflow to the Power Plant (Average Inflow (m³/s) and Utilized Inflow (m³/s)).
    Explanation: Specify the average inflow rate in cubic meters per second (m³/s) and the flow rate that is utilized for power generation.

  12. Connection to the Grid or Purchaser and Connection Voltage (V or kV).
    Explanation: Describe the power plant's connection to the electricity grid or purchaser and provide information about the voltage of the connection in volts (V) or kilovolts (kV).

All of these pieces of information should be available in the power plant's design. For your convenience, a table is provided here for completion.

4. Executive Plan

When the plan is to commence construction, when it is expected to be completed, and when the operation of the power plant is intended to start. It is sufficient to specify a season, such as the early or late part of the year 200X, or as is often done, referring to the point when power has been generated with granted permits, as this clarifies their status.

In Article 4 of the laws, provisions state that the permit expires if construction and operation do not commence within a specific number of years from when the permit was issued.

Supervision: The permit issuer can stipulate that the applicant must outline how supervision will be conducted to ensure that the construction is in accordance with the design and conditions, which may be established and related to the arrangement of the power plant. This is especially relevant when the safety and interests of unrelated parties could be threatened.

5. Financing

Explanation: In Article 5 of the regulation, it is stated that the permit holder needs to demonstrate that they can secure sufficient funds to construct the power plant and necessary infrastructure associated with it. A declaration from banks or other investors can be presented as evidence of this financial capability.

6. Contracts regarding connection to the transmission system or distribution network in the relevant area.

It needs to be ensured that the intended use of electricity is in accordance with legal provisions, and that an agreement has been reached for the transmission of electricity from the power station before a permit is granted.

7. Information on whether an agreement has been reached with landowners and owners of energy resources regarding compensation for the utilization of the relevant resource must be provided.

Explanation: Water and geothermal rights are tied to land ownership, and it is evident that conditions for a power station are not met unless an agreement has been reached with the relevant rights holders. This is addressed in the third paragraph of Article 4 of the regulations, which states, among other things, that if neither an agreement on compensation for the power station permit nor a request for expropriation has been submitted within 90 days of the issuance of the permit, the permit becomes void. From this, it is clear that if agreements are not fully secured when applying for a power station permit, it is crucial for the permit applicant to provide a detailed account of the status of agreements with owners of energy resources.

8. Explanation: Information about the main environmental factors of the power station and its effects.

Whether an environmental impact assessment is required or not, the applicant must provide the necessary information to the Planning Agency to obtain a decision on the obligation to conduct an assessment or the result of an assessment of environmental impacts, if such an assessment is deemed necessary. If it turns out that an assessment is required, the applicant should detail the countermeasures and other actions that are planned to be taken regarding the environmental impacts that the power station may have according to the submitted data. According to the objective of the law, emphasis should be placed on the utilization of renewable energy sources and consideration of environmental objectives in other aspects. In the regulation (5th section), this is implemented in a way that the Minister should take into account the assessment of environmental impacts carried out and the final decision of authorities regarding it when granting the permit. Information about existing utilization in the area should also be provided, as appropriate.

9. Information about permit

The applicant should provide information about any permits they consider necessary to obtain from other authorities and whether the proposed project complies with the current zoning regulations in the area where the power station is planned to be built. The following are examples of permits that may be required for hydroelectric power stations: Construction permits and building permits from the relevant municipality, and depending on circumstances, permits from: The Environmental Agency, the Fisheries Authority, the health committees of local municipalities, and labor inspectorates.

Appendix 1 - Requirements of the Electricity Act

Section 5 of the Electricity Act (65/2003) provides clear guidance on the expectations set by the law. It aims to ensure the following, according to Article 5 of the Act:

1. Adequate supply.

2. Safety and reliability (in operation).

3. Efficiency of the electricity system.

4. Consideration of sustainable utilization of renewable energy sources.

5. Consideration of environmental protection and land use.

To honor these objectives, several crucial aspects are outlined, and the licensing authority can emphasize these points in relation to license issuance:

1. Technical and financial capacity for operation.

2. Agreement on connection.

3. Proper coordination of multiple power stations within the same watershed and adjacent geothermal areas.

In Article 4 of Regulation 1040/2005 regarding the implementation of the Electricity Act, it addresses the information that the applicant must submit, likely to demonstrate to the licensing authority that the applicant's power station meets the aforementioned expectations.

Finally, in Section 6 of the Act, the content of the power station license is discussed. It is essential that the license encompasses the commitments the licensee undertakes by connecting to the electricity system and selling electricity products, as well as other obligations related to various interests, including those discussed in the Environmental Impact Assessment (MÁU).

For the first three points, general expectations are described, and it is uncertain whether specific actions can be directly attributed to them. The licensing authority may impose conditions related to these aspects when granting the power station license, although it is not considered likely, except under special circumstances. In such cases, appropriate data would likely be specifically requested.

The fourth point addresses the connection to the utilization permit, emphasizing that the power station license relies on the authorization to exploit the resource.

Following these four points, applicants need to demonstrate their compliance in their application for a power station license. These categories pertain to environmental matters, technical and financial capability, and agreements on connection and operation.

Appendix 2 - Contents of the Power Station License (Article 6 of Act 65/2003)

1. Size of the power station and delineation of the power station area

It can be considered customary that the power station license clearly specifies the facilities (identification number, address, and dimensions) to which the license applies and who is granted the license.

2. When construction shall commence and when it shall conclude

Relates, among other things, to provisions regarding the validity period of the permit and possibilities for its revocation.

3. Information and Reporting Obligations of Permit Holders to the National Energy Authority and the Transmission Company, as necessary for the respective parties to fulfill their roles.

Regarding the reporting obligation concerning the utilization of resources, it is natural to refer to resource laws; however, on the other hand, it is reasonable to note that the obligation imposed on the applicant according to those laws begins to take effect upon the commencement of the operation of the power station. As for the submission of production data to the National Energy Authority and the transmission company, more detailed specifications about the specific data involved will likely need to be provided.

4. Safety and Environmental Protection Measures

The safety aspect in this case could possibly refer to ensuring that the structures do not pose a threat; dams do not breach, etc., and equipment in the geothermal power plant, where steam is under high pressure.

5. Conditions regarding the technical and financial capacity of the licensee.

The technical and financial capacity of the licensee can refer to the operational security of the system. The impact of this varies greatly depending on the size (importance) of the respective units within the system's operation.

6. Disposition of structures and equipment at end of life cycle

This matter has been discussed little, as it is quite intricate. Likely, this issue comes directly from European regulations. If this is to be taken seriously, it must be ensured that the license holder would establish a fund from the operation to be used for decommissioning the relevant structures and repairing damages when the unit is shut down. However, it's debatable whether dismantling hydroelectric dam structures would necessarily be beneficial to recover. It's possible that hydroelectric plants can continue operating almost indefinitely with proper maintenance. The uncertainty about the lifespan of geothermal power plants is more relevant to the geothermal system itself rather than the structures, as geothermal systems can likely be renewed almost endlessly. This matter requires further consideration.

7.  Another aspect pertains to the conditions of the permit and the obligations of distribution utilities according to these laws.