Water

In the discussion of water, it is convenient to differentiate according to availability (surface water, springs and groundwater) as well as its useful quality (useful water, potable water, groundwater). The main manifestations of Icelandic rivers are also well-known: waterfalls, spring rivers, drift rivers and glacial rivers.

Water is the basis of all life, and access to wholesome drinking water is the foundation of health and progress. Sufficient access to water is a prerequisite for most businesses in the country, e.g. fishing, aquaculture, industry, and agriculture (including horticulture, dairy production, and meat production). Various pastimes, including swimming pools and baths, are unthinkable without abundant and easy access to water. Water is also the country's main source of energy, both in the form of hydropower and geothermal energy.

Role of the NEA

The National Energy Authority (NEA) is responsible for administration in two specific areas of water affairs in Iceland. On the one hand, there is water as a resource for direct use, and, on the other hand, water as an energy carrier for hydropower and geothermal energy. The organization also manages defined projects for construction in and around water.

The NEA works closely with other public bodies that are each responsible in their own way in related areas of water affairs. These include the Directorate of Fisheries, which grants permits for construction in and around fishing lakes, and the Icelandic Meteorological Office, which is responsible for general research on water conditions. The Environment Agency of Iceland administers laws on water management and, together with the Icelandic Food and Veterinary Authority, oversees health inspections by local health committees, which in turn are responsible for the cleanliness of drinking water. The Marine and Freshwater Research Institute and the Icelandic Institute of Natural History investigate life in water, and the National Planning Agency handles environmental assessment and planning. There is also cooperation with energy and utility companies and their association, Samorka, as well as with the various local authorities. This is not an exhaustive list, as the water comes from many places and from many sides.

Applications and licences

The National Energy Authority grants licences for the exploration, research, and utilization of groundwater, whether it concerns private lands or national territories, in accordance with the laws on the exploration and utilization of resources in the earth. The institution also manages administration and oversight related to surface water according to water laws, and it issues exploration and utilization licences for water-related preparatory activities in line with electricity laws.

When granting licences for water utilization, as well as for other licence issuances, the authority must ensure that the licence aligns with the water protection objectives outlined in the water management plan developed in accordance with the Water Management Act, No. 36/2011. In cases where proposed activities fall under the provisions of the Environmental Impact Assessment and Planning Act, No. 111/2021, the result of the Planning Agency's assessment of non-mandatory environmental impact assessment or the authority's opinion based on the project's environmental impact assessment report must also be available before a licence application is submitted to the National Energy Authority.

Licences - Applications (and further information):

Licences for exploration and research of groundwater.

Licences for groundwater utilization.

Research licence for preparatory hydropower projects.

Hydropower plant operation licence.

The NEA's licence for activities in and around water bodies.

Utility water

Utility water refers to any type of water used for consumption, drinking, or other direct needs, such as gardening, industrial processes, heating buildings with or without heat pumps, and aquaculture. In Iceland, utility water is mostly sourced from groundwater or springs, with direct utilization from surface water being the exception. Groundwater can be fresh, brackish, or saline like seawater.

Freshwater

Potable water is freshwater intended for consumption and food production that meets specific requirements for cleanliness and quality. Potable water is defined as food of quality according to relevant laws and regulations. The resource of potable water encompasses all water that can be utilized as potable water in a reasonable and sustainable manner.

Groundwater

Groundwater is defined as water below the surface of the earth, either stagnant or flowing, which generally fills interconnected voids within the corresponding geological layer. Utilizing groundwater typically requires man-made infrastructure, such as wells, to bring the water to the surface. The utilization of groundwater is generally subject to the permitting of the National Energy Authority in accordance with Article 6 of the Act on the Exploration and Utilization of Mineral Resources in the Earth, No. 57/1998 (Mineral Resources Act).

Ownership rights to groundwater, as well as other resources within the earth, follow the principle of ownership. In common lands, resources within the earth are owned by the Icelandic state, unless others can prove their ownership rights. Without a permit, landowners are allowed to use up to 70 liters per second of groundwater on their property for household and domestic needs, according to Article 14 of the Mineral Resources Act.

Springs

Springs are considered natural emergence points of groundwater to the surface. According to water laws, No. 15/1923, any person may establish wells and reservoirs on their own property, where water is extracted or utilized on-site, without drilling or major construction intended to bring water to the surface. In certain cases, individuals other than the landowners can obtain water from another's property if there is a surplus of water available, provided that agreements are reached with the landowner regarding the operations or compensations, or authorization for appropriation is obtained.

Surface water

Surface water encompasses all flowing and standing water on the Earth's surface, in solid or liquid form. The utilization of surface water for consumption is diminishing, but the primary direct use is for hydroelectric power generation. According to Article 7 of the Water Act, "all waters shall flow as they have flowed since ancient times," and this fundamental rule has been present in the laws since the time of the Commonwealth. According to the same article, it is prohibited without special authorization or legal permission to:

1. Alter the waterbed, direction of flow, water volume, or water flow, whether fully and entirely or for a specific period, as well as to raise or lower the water table,

2. Obstruct running water or construct structures in water or over it,

3. Divert water from one property to another,

if damage or danger to another person's property or rights occurs, unreasonable disturbance to general traffic, or harm or danger to national or public interests is caused.

According to the Water Act, permission must be sought for water utilization (Article 68), alterations to watercourses, construction of new watercourses or other structures in or around water (Article 75). In all cases, permission must be obtained from the National Energy Authority, which handles the administration and supervision of compliance with the Water Act (Article 143), except for cases involving fishing lakes as defined in the laws on salmon and trout fishing, No. 61/2006. In such cases, the Fisheries Administration grants permissions for operations in and around these lakes (Article 33 of the salmon and trout fishing laws).

Regarding permits for the development of waterfalls, this is governed by the Electricity Act, No. 65/2003, and the National Energy Authority's permits for mediation, allocation, and utilization of water for hydroelectric power generation are then part of the exploitation permit, as stipulated in Article 4 of the Electricity Act. Further information can be found in discussions on hydropower.

Hydropower

Each landowner, including state-owned lands, possesses the right to control and utilize the water, running or stationary, that flows within their territory, as outlined in the Water Act, No. 15/1923. Landowners who hold water rights, as well as others who have acquired permissions, are entitled to harness the energy from the water on their land, provided that they are not depriving others of the water they need for their own use according to the provisions of Chapters III and IV of the same law. No undue inconvenience should arise from such usage, nor should the water be wasted in a manner that causes significant discomfort.

Permits from the National Energy Authority are required for the construction and operation of power stations. However, such permits are not necessary for power stations with a capacity of less than 1 MW, unless the energy is fed into the distribution system of public utilities or the transmission system. Additionally, no exploitation permit is needed for emergency power stations solely designed to provide energy for contingencies, supply shortages, energy deficits, or other similar reasons.

Owners of power stations with a capacity of 30-1,000 kW are required to provide technical information about their power station to the National Energy Authority. Furthermore, an annual report on the total power generation of power stations with a capacity of over 100 kW is mandatory.

The National Energy Authority has prepared guidelines and application forms for obtaining an exploitation permit, including those for hydroelectric power stations.