Ten years of standstill in energy

Electricity generation in Iceland was the same in 2025 as in 2015: 18.8 terawatt hours. Over those ten years the population grew by a fifth, so generation per person fell. Power on the map, the review Viðskiptaráð published last week, asks why.

The reason is not a lack of power project options. The Master Plan has mapped options that could multiply the country’s electricity generation. The problem is the system that is supposed to process them. Since the Master Plan Act was passed in 2011, only two new power plants have been built, in addition to the Vaðölduver wind farm, which started generating this year.

A process that takes decades

Before a permit for a power plant can be applied for, the option has to be placed in the Master Plan’s utilisation category. Expert groups assess it and the steering committee proposes a categorisation. The minister can change the proposal before submitting it to Althingi, which can also change it. Beyond Althingi’s approval, environmental assessment, planning and permitting are then required, with many avenues of appeal.

Landsvirkjun estimates that the process from idea to power plant takes twelve years at best. Hvammur Power Station was first assessed in 1999 and will be commissioned 32 years later. It took sixteen years to place it in the utilisation category, and its permits have been revoked three times. A wind farm in Garpsdalur was submitted for assessment in spring 2020. Since then, one steering committee has proposed the utilisation category, a new steering committee the on-hold category, and the minister the utilisation category. The option has yet to go through parliament and therefore remains uncategorised.

Viðskiptaráð proposes abolishing the Master Plan Act so that power plants go through the same general permitting process as other projects, with a single avenue of appeal. The transmission system should be built ahead of demand and wind power in already disturbed areas given priority. Finally, the government should set a target of 43 terawatt hours of electricity generation by 2040, more than double today’s level.

The map shows every option assessed

The review has drawn strong reactions, including in an article on Vísir by the author Andri Snær Magnason. The criticism focuses mainly on Viðskiptaráð’s map of power project options, protected areas, the scale of the target and who should decide where power plants are built. All of this can be answered.

The map in Viðskiptaráð’s review shows every option that has been assessed under the Master Plan, along with the status of each. All variants are counted, including those that are mutually exclusive, and the map says so. The review states plainly that not all the options could be used at the same time.

Their combined energy potential exceeds 80 terawatt hours a year. Excluding all double counting, the potential can be estimated at around 70–75 terawatt hours, depending on how it is counted, but there is no official figure. Doubling electricity generation requires about a quarter of that potential. The options Althingi has already placed in the utilisation and on-hold categories are almost enough on their own.

None of them is at Geysir or Dettifoss, in Askja, Kverkfjöll or Kerlingarfjöll. These places appear on the map because power project options have been assessed there, not because Viðskiptaráð wants to develop them. National parks and protected areas would remain protected by law, and projects would still be subject to the laws on nature conservation and environmental assessment.

Andri calls the target insane. It is certainly ambitious, but it is in line with the highest scenario in the government’s 2022 green paper, which assumes a full energy transition and increased use by large-scale users. The target is therefore not plucked out of thin air but based on a scenario the government itself has put forward.

Althingi should set the rules of the game

Finally, Andri criticises the fact that under Viðskiptaráð’s proposal only particularly large power plants, for example over 600 megawatts, would go before Althingi, when no unused option on the map reaches that size.

That is exactly the idea. Under the proposal, Kárahnjúkar Power Station would have required Althingi’s approval, but in general it should not be parliament’s role to decide on individual power plants, any more than on other large business and infrastructure projects. Althingi should set the rules on nature conservation, environmental assessment and planning, and decisions on individual projects should be based on those rules.

Power plants should then go through environmental assessment and municipal planning processes like other projects, where the public and local residents can comment. Nature conservation and democratic participation would not disappear just because Althingi stops approving individual power project options.

Standstill is not a law of nature

The link between energy use and living standards is one of the clearest there is. No country with high living standards has low energy use. Iceland has long been in a strong position, but we are starting to fall behind ourselves.

There is no need to choose between protecting valuable nature and using the country’s energy resources. Both are possible with clear rules, robust environmental assessment and a predictable permitting process.

The standstill of the past ten years is not a law of nature. It is the result of a system in which it takes years and decades to bring new power plants into operation. It is time to change that.

This article was first published on Vísir.

This article was automatically translated from the Icelandic original.