Iceland’s Minister for the Environment, Energy and Climate, Jóhann Páll Jóhannsson, has described the proposed Hvalávirkjun hydropower project as the only comprehensive solution to the energy challenges facing the country’s Westfjords region.
Speaking at the Westfjords Energy Forum in Ísafjörður on 3 June, the minister said the project, together with associated grid connections, would significantly improve electricity supply security, increase transmission capacity and create opportunities for new economic activity in the region.
According to the minister, the Hvalávirkjun project and a planned transmission connection at Miðdal could increase the capacity of the regional power system from around 50MW to as much as 150MW. The development would also strengthen grid resilience and enable islanded operation of the Westfjords network during outages on the national transmission system.
The minister also announced plans to introduce legislative changes later this year to reform rules governing transmission connection charges for power projects. The proposed changes are intended to better reflect wider system and societal benefits when assessing grid contributions for new developments.
At the event, VesturVerk chairman Ásbjörn Blöndal said preparatory work on the Hvalávirkjun project was continuing and that, under an updated schedule, power generation could begin in 2031. He noted that a March ruling overturning a permit for initial preparatory works would require additional environmental assessment and permitting before construction can proceed.
The project developer expects preparatory works and transmission cable installation to take place during 2027–2028, followed by main construction activities from 2029. However, the timetable remains dependent on the completion of permitting processes and the outcome of any further legal challenges.
VesturVerk said one of the project’s main financial challenges remains the transmission system contribution required by grid operator Landsnet, which is estimated at around ISK7bn (US$55m) and would increase the project’s capital cost by approximately 22%.
Back in January this year, it was announced that the Hvalávirkjun hydropower project had been awarded gold certification under the Hydropower Sustainability Standard (HSS), recognising its performance in governance, environmental and social planning, and stakeholder engagement.
