ESA Initiates Investigation

Landsvirkjun received a request for information (RFI) from the EFTA Surveillance Authority (ESA) in June 2024, in which information and documentation were requested regarding the potential sale of electricity by Landsvirkjun to new customers. This request was answered in August of the same year.

Today, ESA announced its decision to formally open an investigation into whether Landsvirkjun has infringed EEA competition rules by refusing to supply electricity to enterprises seeking to produce hydrogen or e-fuel in Iceland.

The decision to initiate proceedings does not signify that ESA has made a finding of infringement. Nor will it prejudge in any way the outcome of the investigation. The decision means only that ESA will proceed with an in-depth investigation.

SA’s decision comes as a surprise. The reason it has not been possible to sell electricity to e-fuel projects is the very high utilization of the system and Landsvirkjun has, in recent years, had to decrease delivery of both capacity and energy to existing customers with curtailability clauses in their contracts. Similarly, delays in the permitting process for new power plants have made it challenging to support many new projects.

Landsvirkjun has had to inform numerous parties with highly promising projects that, at this stage, it is not possible to accommodate their requests to purchase energy due to these reasons. We do not rule out that this may become possible in the future, as it will depend on the development of new power plants. It is therefore genuinely surprising if the inability to deliver power or capacity—due to their unavailability in the system—and the resulting denial of sales requests, could constitute a breach of the EEA Agreement.

We will make every effort to clarify all the matters that ESA believes require explanation, and we are fully confident that the investigation will reveal nothing improper.