Grid Access

Updated: 19.12.2018

Author: Jörn Banasiak

For their power plants to be connected to the electricity grid, plant operators require a power development licence, issued by the Minister of Industry, Energy and Tourism. Such licence may be granted to any independent legal and taxable entity. According to paragraph 2 of article 11 of the Electricity Act, all power plants shall be connected to the grid. The grid operator is supposed to act in a non-discriminatory manner (art. 9 Electricity Act). Electricity from renewable sources is not granted priority connection.


Process flow

A licence holder is required to construct and operate an electric power plant with a capacity exceeding 1 MW. Plants with a capacity of 1 MW or less must be reported to the National Energy Authority (Orkustofnun) if the energy produced is sold or exported to an electricity supply system (art. 4 Electricity Act).

There is an obligation to connect power plants to the transmission grid. An agreement on the connection between the plant operator and the grid operator is made when the plant operator has submitted an application for a power development licence (art. 5 Electricity Act).

Priority to renewable energy

  • Priority to renewable energy
  • Non-discrimination

Electricity from renewable sources is not granted priority connection (art. 9 Electricity Act).

Capacity limits (quantitative criteria)

If the grid operator is of the opinion that grid capacity is insufficient to connect a power plant, the electricity may be transmitted directly from the power station to the final customer. Direct transmission to the final consumer requires authorisation by the Minister (art. 11 Electricity Act).

Distribution of costs

Plant operator

The plant operator bears the costs of connection (art. 12 par. 3 no. 1 Electricity Act). 


Further information

Basic information on legal sources