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National Planning Agency accepts Bjarnarflag Power Plant and Bjarnarflag Line 1

March 2, 2004

On the basis of data presented by Landsvirkjun, comments, criticism and the constructor’s replies to these, it was the conclusion of the Planning Agency that the envisaged 90-MW geothermal power plant at Bjarnarflag, built according to Options A and B, and the construction in Skútustaðahreppur district of the 132-kV Bjarnarflag Line from the power station to Krafla Station according to Options Aa, Ab and B, would not lead to significant environmental impact, provided certain conditions were fulfilled.

The conditions presented by the Planning Agency are as follows:

1. Landsvirkjun is to finance the operational supervision and monitoring discussed in the ruling. Requirements are thus for example to monitor drawdown and temperature trends in the geothermal system, boiling points in the bedrock, any reduced flow from drill holes, and changes in the chemical composition of drill hole fluid.

2. Landsvirkjun shall be in charge of the area supervision and monitoring discussed in the ruling with regard to alterations caused by geothermal production in the geothermal area and its immediate surroundings. Examples of what this involves are investigating the chemical composition of hot springs and steam vents near the processing area, measuring ground temperatures, monitoring hot spring activity at Hverarönd, measuring land elevations and weight, and monitoring gas and seismic activity in the area. Active geothermal sites must also be mapped.

3. Landsvirkjun is to monitor whether geothermal production impacts the flow and chemical composition of warm groundwater to Lake Mývatn, by means of chemical analyses and measurements of temperatures and water levels in drill holes and fissures. In the event of such changes being experienced, countermeasures must be taken as outlined in the Planning Agency ruling.

In accordance with Article 12 of Act No. 106/2000, the ruling of the Planning Agency may be appealed to the Minister for the Environment; the deadline for appeal is 2 April 2004.

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