Faroe Islands to allow private companies to sell electricity to households

The Faroese government’s new coalition agreement will permit companies other than the state-owned energy provider SEV to sell electricity directly to private households, Kringvarp Føroya reports.

Under the plan, private producers will be allowed to generate electricity and feed it into SEV’s grid before selling it on—either as a bundled package, such as for heat pump systems, or through separate retail agreements. The move marks a shift from the previous government’s proposed electricity law, which faced opposition from the Social Democratic Party and Republic over concerns it would restrict competition.

The earlier draft law had included a provision ensuring SEV retained sole ownership of the grid, blocking large industrial players from generating their own power and disconnecting from the shared network. That restriction had stalled projects like the planned Eysturlund wind farm in Lambahagi, a joint venture by Effo and Bakkafrost intended to supply electricity to Fuglafjørður.

The coalition agreement now states that private entities may enter long-term partnerships with SEV, where SEV retains grid ownership but allows third-party supply. It remains unclear whether the electricity law will be revised to reflect this change.