All construction work carried out by Landsvirkjun is accompanied by unavoidable disruption to the environment and can have an impact on the ecosystem and surroundings. Any assessment of the potential environmental impact of power projects is carried out professionally and stakeholders are given the opportunity to familiarise themselves with potential projects and to put forward their views. The assessment process is the precursor for all construction projects subject to assessment according to the Icelandic Environmental Impact Assessment Act.

Environmental impact assessments (EIAs) were prepared for the Blanda Diversion Hydropower project and the Búrfell wind farm project in 2014. A decision was also requested from the National Planning Agency pertaining to the need for a review of the EIA for Bjarnarflag.


Proposed power stations along the Blanda waterway

Water from the Blanda Reservoir is diverted through canals and lakes across a distance of approx. 20 km until it reaches the intake structure for the Blanda Hydropower Station (the Gilsárlón Reservoir). Landsvirkjun has assessed the feasibility of utilising a 69 metre head on this diversion. This assessment is in keeping with the Company’s commitment to the more efficient utilisation of natural resources. Plans for the area include three small-scale power stations along the waterway with a total capacity of 194 GWh per year and an installed capacity of 31 MW.


Proposed power projects in the Blanda area


There are three potential projects: The first is the Kolka hydropower project which utilises the head from the Blanda Reservoir and down to the Smalatjörn Lake. The second project is the Friðmundur hydropower project which utilises the head from the Smalatjörn Lake down to Austara- Friðmundarvatn, and the third is the Þröm hydropower project which utilises the head from Austara-Friðmundarvatn down to the Gilsárlón Reservoir.


These power projects were assessed during the second phase of the Master Plan for Hydro and Geothermal Energy Resources in Iceland. The Steering Committee found that of all the projects under consideration, the Blanda diversion hydropower projects were those that would have the least impact on the environment. The parliamentary resolution on the protection and utilisation of land areas (Master Plan) approved by the Icelandic parliament (Alþingi) in January, 2013 categorised the Blanda diversion hydropower projects as ‘appropriate for development’.

The total energy generation capacity of the proposed power stations along the Blanda diversion is estimated to be 194 GWh per year.

Work on the project design began in 2011 and work on the environmental impact assessment began in 2012. Both projects were completed in 2014. The assessment process included an open meeting for local residents held at the Húnavellir School.

The assessment report was submitted to the National Planning Agency in September and their opinion was released by the following October.

An environmental impact assessment evaluates the impact of the construction of the power station, excavation of canals and dams, formation of reservoirs and the construction of roads and other manmade structures. The assessment criteria included geological formations, hydrology, sedimentation and erosion, vegetation, birdlife and river biota, archaeological aspects, noise, visual impact, landscape, society and land use. The effects of construction are generally proven to be rather insignificant.

Mitigation measures carried out as a result of the proposed power projects along the Blanda diversion focus on ensuring that manmade structures blend in with the landscape, therefore reducing their visual impact.

The National Planning Agency requires Landsvirkjun to cooperates with the Environment Agency of Iceland with regard to the final location of the canal from the Þröm Hydropower Station to the Gilsárlón Reservoir. The objective is to prevent or at least minimise the loss of wetland areas.
Work on the necessary changes to the municipal plan for the Húnavatn Constituency and the regional development plan for the mid-highlands in Iceland (for 2015) began in 2014. Changes to the regional development plans are being considered by the Minister for the Environment and Natural Resources. If the changes are approved then proposed changes to the general development plan will immediately become valid. The power development permit will be applied for in 2015.


Búrfell Wind Farm

In 2012, Landsvirkjun installed two wind turbines for research purposes in a lava field by the name of Hafið which is located between the Búrfell and Sultartangi Hydropower Stations. The results of the project show that this is a particularly advantageous area for generating electricity via wind power. Landsvirkjun has therefore decided to assess the feasibility of constructing a wind farm in the area.


The wind farm above Búrfell


The proposed Búrfell Wind Farm would cover an area of 40 km2 above the Búrfell area. Plans include anything up to 80 wind turbines (200 MW). The area will probably be built in phases to meet energy demands as needed.


This is the first time that the feasibility of constructing a wind farm in Iceland has been considered. The project is innovative and a large part of the work includes a full analysis of legislation and regulations in order to introduce new regulations suited to the endeavour. The project will also require a full assessment of the potential impact of such a project on the ecosystem and society. This would be the first assessment of its kind in Iceland.

Preparation work for the Búrfell Wind Farm began in 2014. Landsvirkjun has put forward a proposal for an environmental impact assessment. The criteria include landscape, visual impact, noise, geological formations, birdlife, tourism and recreation, archaeological aspects, vegetation, land use and land protection.

Plans for the Búrfell Wind Farm include anything up to 80 wind turbines with a total energy generation capacity of 705 GWh per year.

Visual impacts and birdlife are important environmental aspects when it comes to the construction of wind farms and they will be given special consideration. Research on the impact of wind turbines on birdlife is relatively new in Iceland and is conducted according to international guidelines. More detailed information on the impact on birdlife can be found in the chapter on: Effects on the Ecosystem. Extensive research has also been conducted on the potential impact on society including employment in the area, tourism and the economic impact on nearby areas as well as the potential threats and opportunities offered by the project.

The assessment report should be available in October, 2015.


The Bjarnarflag Geothermal Station

The current Bjarnarflag Geothermal Station has been operational since 1969. Extensive monitoring and research, aimed at potentially increasing the utilisation of the geothermal resource in a sustainable manner, has been conducted in the area for a number of years. The result is the careful development of Bjarnarflag in two separate 45 MW phases. The project has been categorised as ‘appropriate for development’ by the Master Plan for Hydro and Geothermal Energy Resources in Iceland.


The Bjarnarflag Geothermal Station

The two- phase development of the Bjarnarflag project will ensure that the results of the first phase are carefully considered before any decision is made on the second phase, therefore minimising any negative effects from the project.


The re-assessment of the Environmental Impact Assessment

Landsvirkjun has been involved in preparation work for a new power station in Bjarnarflag since 1992. An environmental impact assessment (EIA) was developed for a 40 MW power project between 1995 and 2000. The National Planning Agency subsequently decided that further information would be required. Landsvirkjun then made the decision to expand the project to 90 MW. The National Planning Agency released its verdict in February, 2004, approving the project with the proviso that operations, as well as environmental aspects would be monitored. Preparation work has continued on the project in accordance with the EIA and the National Planning Agency’s verdict and tender design work has been completed.

Ten years have passed since the National Planning Agency released its verdict and the law dictates that development must begin within ten years. Once this period of time has elapsed, the Icelandic National Planning Agency can review the EIA entirely or in part before issuing a new development permit. Landsvirkjun therefore asked an impartial body to conduct a review of the EIA from 2004 taking into consideration research completed since then, technological advances and changes to legislation and regulations on the environment. They concluded that there were no significant changes to the baseline or to the legal framework that would require a complete new assessment. However, the discussion on seismic activity within the report was not found to be fully comprehensive.

Landsvirkjun requests a decision from the National Planning Agency on the full or partial review of the assessment report for a 90 MW power project.

The National Planning Agency released its decision on the 7th of November (2014), requiring a review of the environmental impact of the 90 MW Bjarnarflag power project.

The Agency can, according to Article 12. Act. 106/2000, request a review of the environmental impact of a project if the following ‘significant changes’ have been identified:

  • Significant changes to legislation, pertaining to the environment
  • Significant changes to the natural environment or land use within the affected area
  • Altered international commitments
  • Technological advances

After a thorough review of the decision of the Planning Agency's assessment, Landsvirkjun believes that there have been no significant changes to the premise for the power project and this assessment is confirmed by the review carried out by the relevant professional institutions. Landsvirkjun believes that the National Planning Agency did not consider the comments made by the National Energy Authority or the Environment Agency and various other institutions that could not identify any ‘significant changes’ (as outlined above) to the premise for the project. They also did not consider Landsvirkjun’s proposal for a 45 MW station instead of a 90 MW station which should have influenced the decision reached by the Agency.

According to administrative law, such decisions should be measured and based on a clear legal foundation.

Landsvirkjun believes that the decision made by the National Planning Agency is a burdensome, administrative decision and will lead to a costly and extensive partial review of the EIA which various institutions have deemed unnecessary and will not reveal any new information. Landsvirkjun has therefore made the decision to appeal the decision to the Appellate Committee for environmental and resource issues.


Utilisation history at Bjarnarflag



Research and utilisation begins


Léttsteypan (Concrete plant)


Kísiliðjan (Diatomite factory)


Bjarnarflag Power Plant, 3 MW


Reykjahlíð hot water utilities


The Krafla Fires


Heat exchange plant


Proposals for the further development of Bjarnarflag are introduced


Work begins on an EIA for a 40 MW station


Assessment report put forward for further review


The National Planning Agency agrees to a new EIA for a 90 MW station


Verdict released: project is approved with various provisons


Mývatn nature baths


Landsvirkjun requests a decision on a full or partial review (October)


The Skútustaða Constituency requests a decision on a full or partial review (February), decision reached (November), decision appealed (December)