Iceland proposes raising framework-plan thresholds for power projects

A draft bill would raise the power thresholds for projects covered by Iceland’s framework plan and allow permit applications and environmental assessments to proceed in parallel, mbl.is reports. The proposals were presented by Environment, Energy and Climate Minister Jóhann Páll Jóhannsson’s ministry for public consultation.

The threshold for electricity generation would rise from 10 megawatts to 25 megawatts, while the threshold for thermal power would increase from 50 megawatts to 125 megawatts. Special rules for wind power would remain unchanged.

The draft would generally integrate permit applications with environmental assessments when a project requires a power-generation permit, a permit to use underground resources, an operating licence for pollution control or authorisation to alter a water body. Authorities could begin processing applications while assessments are under way. If circumstances change or new information emerges, any further assessment and public consultation would focus on the issues affected rather than repeating the full process.

The proposals also set out clearer rules for negotiations with landowners and for expropriation cases, which the ministry says can delay projects. Electricity lines would generally be routed within road protection zones where possible, with the road authority’s consent. Anyone planning work near power lines, on land or at sea, would have to obtain information and consult before starting; the draft also clarifies liability for damage or disruption.

Rules for connecting new power plants and large users to the grid would be clarified. Connection fees would reflect the overall effect of connections on the electricity system, and Landsnet would receive legal authority to charge a feed-in fee. The draft says this could reduce high initial costs that have hindered business development, particularly in sensitive parts of the grid.

The bill would also establish a limited legal framework for background checks on people whose work gives them access to sensitive electricity infrastructure, control systems or information. The ministry says the current difference in procedures for projects above and below 10 megawatts can encourage developers to keep projects below that threshold, even when conditions could support greater generation.