Geothermal Transparency Guide

An overview of regulatory frameworks for geothermal exploration and exploitation

Introduction

The Geothermal Transparency Guide is an online database, initiated and overseen by BBA law firm, which is intended to provide an insight into the legal frameworks governing exploration, exploitation and production of electricity from geothermal resources, in countries where geothermal capacity is being harnessed or is available for harnessing. The regulatory framework in respect of the exploration and development of geothermal energy is in many countries either not existing or fragmented with provisions located in the various sectors of legislation. Many countries rely on laws relating to other energy sources, such as mining. Furthermore, in certain cases no particular administrational authority is entrusted with geothermal matters.

This has in some instances resulted in substantial complications for developers when dealing with public authorities and municipalities, in the attempt to secure exploration licenses and exploit the reservoir. A lack of clarity in respect of the legal framework governing licenses can also be detrimental to public authorities, municipalities and other owners of land containing geothermal resources, as it is critical for such parties to maintain adequate control over the utilization of the reservoirs and make sure that environmental and administrational requirements are being met.

When the terms of a prospective license are not transparent and clear, the risks for financing parties and investors is also increased, therefore making the financing of geothermal activities more time consuming and expensive than necessary.

It is therefore of great importance to explore the possibility of creating certain industry standards for licenses and agreements in the field of geothermal exploration, utilisation and the production of electricity from geothermal resources. If such industry standards are successfully created on an international platform, they could facilitate and increase the development of geothermal energy in the world, which is of the utmost importance, from both an economical and environmental point of view.

We hope that this overview of geothermal regulatory frameworks in the countries included in this database provides a useful insight into certain aspects of the applicable rules in these countries. Such insight can be of importance for the purposes of increasing transparency and awareness of some of the rights and obligations governing applications for licenses to explore, exploit and produce geothermal energy. We also hope that this database can serve as a first step in an eventual international cooperation for the purposes of creating industry standards in this field.

In order to provide an overview of the rules and regulations governing geothermal development, we opted to set forth a list of questions to the most prominent law firms in the field of energy in the countries involved. We acknowledge and stress that neither is this an exhaustive exercise nor does this database provide solutions for public or private parties involved in geothermal energy activities. It can however be useful in gaining a better understanding of the rules applying to such activities. We hope that the information contained herein will be a small contributor in driving us towards a sustainable future.

We emphasize the fact that all contributing law firms have provided their contributions free of charge and for this, we are deeply thankful.

It is finally of vital importance to underline that no information contained herein is supposed to form any legal opinion or statement of facts or circumstances on behalf of the contributing law firms, but merely an overview of the various rules applicable in each country. In this respect, we refer to the Disclaimer, to be found in the database.

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Disclaimer

The Geothermal Transparency Guide is intended as a practical guide to the general principles and features of the basic legislation and procedures in countries included in this database and is for general purposes only. The information contained herein does not purport to provide comprehensive full legal or other advice and is not expected to form basis of any advice provided to any parties whatsoever. BBA and the contributors accept no responsibility for losses that may arise from reliance upon information contained in this database. This database and the information provided therein is intended to give an indication of legal issues upon which you may need further advice.

Japan

Latham & Watkins
Latham & Watkins
www.lw.com

Authors

JOSEPH BEVASH
HIROKI KOBAYASHI

Last modified

2. May 2018

Country Statistical Information

Size of country:
377,972 km2
Population:
126,520,000 (As of March 1, 2018)
Predicted demand growth for energy consumption in the coming years:
Domestic energy consumption showed an increase in FY 2017 by 0.6%, but it will turn into a decrease again by 0.4% in FY 2018. It is expected to continue to be flat at the average annual growth rate of -0.0% up to 2021.
In which year was the first geothermal power plant put into operation:
1966
Total installed capacity of electricity production (MWe):
259,510 MWe
Proportion of electricity produced from renewable energy (% of GWh):
10.4%
Installed capacity of geothermal electricity (MWe):
520 MWe
Direct use of geothermal energy in 2017 (GWh):
No data available
Estimated total potential capacity of geothermal power production (MWe):
23,470 MWe
Number of electricity grid interconnections (links to other countries):
None
Proportional production by source:
  • Geothermal - 0.30%
  • Hydropower - 8.90%
  • Nuclear - 0.60%
  • Solar - 0.70%
  • Thermal power - 89.00%
  • Wind - 0.50%

Key Components of Legal Framework

  • 1. Ownership and access to geothermal resources
  • 1.1 What are the rules on ownership of geothermal resources? Can private parties hold ownership of geothermal resources?

    There are no express rules governing the ownership of geothermal resources in Japan (e.g. underground geothermal fluid and steam). The basic principle is that ownership and rights to the use of underground geothermal resources belong to the owners of the land under which such geothermal resources are located. Private parties are thus permitted to hold ownership rights in geothermal resources. However, in many cases, geothermal resources extend under multiple plots of land owned by different parties, and the courts have ruled that if any use of geothermal resources by a landowner abusively and adversely affects the interests of others using geothermal resources under adjacent plots, then such party will be liable to such other geothermal resources users for any damage caused. Further, pursuant to the Civil Code of Japan, if a region has been subject to de facto local rules on the use of geothermal resources, landowners are obliged to adhere to such de facto local rules when using such geothermal resources.

  • 1.2 Who can grant access to geothermal resources, only state or also landowner?

    Access to geothermal resources requires (a) a land lease from the relevant landowner and (b) a drilling license to be granted by the local government authority. However, a license from the local government authority is not necessary for drilling (i) in order to investigate geological features and/or geothermal structures, (ii) for injection wells in order to reinject geothermal fluid used for power generation, or (iii) to monitor fluid and steam levels, unless there is an intent when commencing such drilling to later convert a test well into a production well for a geothermal power plant.

  • 1.3 Is exploration/exploitation open to foreign investment?

    Yes, it is open to foreign investment. Please note that foreign investment into a power plant business in Japan is subject to scrutiny by the government under Japanese law. All foreign investors are required to notify the Ministry of Economy, Trade and Industry of Japan (METI) within 6 months prior to their proposed investment date, and are required to wait for a maximum of 30 days following notification before completing the investment. If the government authority determines that the investment will affect Japan’s national security, etc., then the government authority will order the foreign investors to modify, or not to proceed with, the investment. 

  • 2. Involvement of administrative bodies
  • 2.1 Which administrative bodies (ministry and/or governmental agencies) are involved in the licensing of geothermal resources, including licensing and developing?

    Prefectural governors.

  • 2.2 Do administrative bodies assign any of their respective roles to a third party, including but not limited to a peer review, during the period of exploration, exploitation and/or production of geothermal resources?

    No.

  • 2.3 Is there a government policy in place concerning geothermal resources? If so, what is the object and to what end?

    In an energy policy statement issued in July 2017, the Japanese government set a target to increase the capacity of geothermal power plants by 200% to 1.5 million kW by 2030.  To achieve this target, the Japanese government has taken, or committed to taking, the following actions (primarily by METI through the governmental agency Japan Oil, Gas and Metals National Corporation (JOGMEC)):

    • Conducting geological surveys using airborne geophysical technology, as well as through the drilling of temperature gradient holes;
    • Subsidizing surveys for the exploration of geothermal resources (surface surveys and well drilling surveys);
    • Financing the exploration, drilling and construction of power plants;
    • Implementing the feed-in-tariff (“FIT”) scheme applicable to geothermal power generation as part of the efforts to expand the utilization of renewable energy;
    • Providing various support for the development of engineers and technologies, accelerated environmental assessment, and the assistance of local governments.
  • 3. Allowed Exploitation
  • 3.1 Is exploitation of resources subject to licensing? Do landowners have the right to exploit recourses without a license? If yes, to what extent?

    The approval of the local government authority is required for any exploitation of resources. Landowners do not have the right to exploit resources without a license.

  • 4. Role and voice of landowner or “project affected people” in the licensing procedure and land lease agreements
  • 4.1 Does the landowner or any “project affected people” have a role in the process of granting a license for:
       (i) exploration,
       (ii) exploitation, and
       (iii) power plant (generation license)?

    As noted above, a land lease from the relevant landowner is required for any of (i) through (iii), as ownership and rights to the use of underground geothermal resources belong to the landowner.

    (i) Exploration: No license is necessary, and therefore no landowner is involved in licensing, to the extent that drilling is intended only for exploration and there is no intention by the user to convert such test wells into production wells (as mentioned above).  

    (ii) Exploitation: In order for the exploitation of geothermal resources to be approved by the local government authority, a grant from the relevant landowner is required.

    (iii) Power plant: The landowner does not have any role in the grant of a license for power plant construction.

  • 4.2 Will an opposition of a landowner or any “project affected people” have a bearing on the process of granting a license for:
       (i) exploration,
       (ii) exploitation, and
       (iii) power plant (generation license)?

    (i) Exploration: No.

    (ii) Exploitation: Drilling for exploitation requires the approval of the local government authority, and either ownership of the land, or rights to use the land for such exploitation, are necessary for such approval. If the landowner does not permit the exploitation (e.g. because the exploitation falls outside the scope of the land lease), approval for such drilling will be denied.

    (iii) Power plant: No.

  • 4.3 Are the terms of land lease agreements regulated and if so, (i) what is a general timeframe of land lease agreements and (ii) what are the obligations for decommissioning at the end of the term?

    (i)  There are no regulations that apply specifically to land leases for access to geothermal resources. Under general regulations of lease agreements, the term of a land lease must be 30 years or longer.

    (ii) There are no regulations on obligations for decommissioning, but it is typical for a lessee to be contractually required to restore the original condition of the land at the end of the term by removing any buildings or equipment constructed on leased land.

  • 5. Criteria for granting of a license
  • 5.1 Which documents need to be submitted and what is the criteria for obtaining a license for:
       (i) exploration,
       (ii) exploitation, and
       (iii) power plant (generation license)?

    (i) Exploration: For exploration that does not involve drilling, no approval or license will be required. Even if exploration involves drilling, no approval or license will be required if the drilling is intended only for exploration and there is no intention to convert such test wells into production wells.

    (ii) Exploitation: The following documents must be submitted in order to request approval from the local government authority for exploitation:

    • A drilling approval request form (setting forth the applicant’s name and location, its representative’s name, intended use of geothermal resources, location of the drilling site, description of its surrounding area, size of the transport pipe for geothermal resources, method of drilling, structure and performance capability of main facilities, start date and estimated end date of construction).
    • A drilling site plan and a map of the surrounding area.
    • A diagram/plan of the facilities, and structural drawings of main facilities.
    • The applicant’s rules and regulations in place to prevent accidents caused by natural gas at the drilling site.
    • If the applicant is the landowner, a certificate from the real estate registry and a cadastral map of the drilling sites. If the applicant is not the landowner, a certificate from the real estate registry, a cadastral map of the drilling sites, and a copy of the lease agreement(s) for the drilling site.
    • A written oath that the applicant has not (a) served any sentence for violation of the Hot Spring Act (which governs the drilling and exploitation of geothermal resources in Japan) in the past two years or (b) had its drilling approval revoked by the government due to a violation of the Hot Spring Act in the past two years.
    • Documents designated by respective local government authorities in order to determine (a) the impact to yield, temperature and composition of geothermal fluid, (b) whether the drilling facilities meet the required technical criteria to prevent accidents caused by natural gas at the drilling site, and (c) damage to other public interests.

    Drilling will be approved unless it is determined that: 

    • The drilling will have an impact on the yield, temperature and composition of geothermal fluid.
    • The drilling facilities do not meet the required technical criteria for prevention of accidents caused by natural gas in drilling.
    • There are risks of damage to public interests (e.g. landslide or land subsidence).
    • The applicant has either (a) served any sentence for violation of the Hot Spring Act in the past two years, or (b) had its drilling approval revoked by the government due to a violation of the Hot Spring Act in the past two years.

    In addition to the above documents, the following documents must be submitted in order to request approval from the local government authority for the use of geothermal resources:

    • A request form for approval of geothermal resources usage (setting forth the applicant’s name and location, its representative’s name, the address of the geothermal resources site, and the expected start date of use).
    • A diagram/plan of facilities, and structural drawings of main facilities.
    • A document to certify that the diagram/plan, construction, facilities, exploitation method of the geothermal resources, and exploitation facilities meet the necessary criteria for preventing accidents caused by natural gas.
    • Photographs showing the present condition of the facilities.
    • The quantity of methane gas (a) included in the geothermal fluid and (b) which will be emitted in the course of the exploitation.
    • The applicant’s rules and regulations in place to prevent accidents caused by natural gas at the drilling site (e.g. rules regarding safety management personnel and systems to implement measures to prevent accidents).
    • A written oath that the applicant has not (a) served any sentence for violation of the Hot Spring Act in the past two years or (b) had its drilling approval revoked by the government due to a violation of the Hot Spring Act in the past two years.

    The use of geothermal resources will be approved unless:

    • It is determined that the facilities do not meet the required technical criteria for prevention of accidents caused by natural gas in drilling.
    • The applicant has either (a) served any sentence for violation of the Hot Spring Act in the past two years or (b) had its drilling approval revoked by the government due to a violation of the Hot Spring Act in the past two years.

    (iii) Power plant: A notification to METI regarding the commencement of any power plant business and approval for the construction of any geothermal power plant is required.

    The following documents must be submitted for notification to METI:

    • Notification for commencement of a power plant business (setting forth the business entity’s name and headquarters location, representative’s name, telephone number, email address, name and location of primary office, addresses of power plants, type of engines used by the power plant, the frequency of electricity and generating power, maximum power that may be delivered to the grid and generating power of each power generator, expected business start date, supply destination of electricity, and contents of the relevant power purchase agreements).
    • Diagram / plan of power generation facilities on the site.
    • Copies of the relevant power purchase agreements.

    No approval is necessary other than the above notification to METI for commencement of the power plant business.

    The following documents must be submitted in order to request approval from METI for the construction of the power plant:

    • A construction plan.
    • A construction time schedule.
    • A plan for power transmission.
    • Description regarding environmental conservation.
    • A short circuit resistance calculation sheet.

    The construction of a geothermal power plant will be approved if:

    • The power plant meets the statutory technical criteria.
    • The power plant has the appropriate technical capability to ensure a continuous power supply.
    • Environmental conservation measures have been taken.
    • The power plant operator complies with environmental assessment documents, as applicable.

    In addition, an applicant must also submit internal safety regulations on the construction, maintenance and operation of the power plant, and the notice of appointment of a chief engineer.

    Further, depending on the location and size of the power plant, it may be necessary to complete an environmental assessment and obtain environmental permits, land use permits and other permits.

  • 6. Duration of Licenses and Renewal
  • 6.1 What is the maximum duration of a license for:
       (i) exploration,
       (ii) exploitation, and
       (iii) power plant (generation license)?

    Basic exploration does not require any approvals or licenses.

    For exploitation (drilling element only), the maximum duration of the license is two years.  

    For exploitation (for use of geothermal resources only) and power plants, the license is of perpetual duration.

  • 7. Terms of License
  • 7.1 What are the general terms of the license for:
       (i) exploration,
       (ii) exploitation, and
       (iii) exploration drilling and other drilling,
       (iv) power plant (generation license)?

    (i) Basic exploration does not require any approvals or licenses. 

    (ii) Exploitation (drilling): The drilling must be completed within two years following the grant of the drilling license. Revision of approvals is not permitted. However, in exceptional cases (e.g. if delays in drilling have occurred due to a natural disaster of events outside the license holder’s control), then the license holder will not be responsible for such delays, and the approval may be revised once during the two-year validity period of such approval.

    (iii) Exploitation (for use of geothermal resources): The licensee is required to operate any equipment used to exploit geothermal resources in compliance with environmental standards, and to obtain an additional license for any material changes to the equipment being used.

    (iv) Power plants:  The licensee is required to comply with various safety and environmental requirements, including undergoing regulators’ pre-completion tests and post-completion periodic inspections, and regularly conducting maintenance and tests.

  • 7.2 Are exploration license holders granted pre-emptive rights with regards to exploitation or do exploration licenses automatically convert into exploitation licenses if the resource has been substantiated? If so, are there any conditions?

    Basic exploration does not require any approvals or licenses.

  • 7.3 Is an exploitation license included in a power plant license or are these licenses separate?

    These licenses are separate.

  • 7.4 Are there any encumbrances in place for the licence holder to keep a license, once granted?

    No particular encumbrances as long as the licensee complies with the terms of licenses described above.

  • 8. Termination and revision of licenses
  • 8.1 What actions by the license holder would warrant revision of exploration-, exploitation- and power plant (generation) licenses?

    (i) Exploration: No license is required.

    (ii) Exploitation (for drilling): The general rule is that no revision of approvals is permitted. However, in exceptional cases (e.g. if delays in drilling have occurred due to a natural disaster or events outside the license holder’s control), the license holder will not be responsible for such delays, and the approval may be revised once during the two-year validity period of such approval.

    (ii) Exploitation (for use of geothermal resources) and power plants: Licenses/approvals for exploitation and power plants are perpetual (as mentioned above) and are not revised.

  • 8.2 Does the license granting authority license have the power to revoke or terminate licenses? If yes, what actions of the license holder would warrant the termination of the license?
       (i) exploration license,
       (ii) exploitation license,
       (iii) power plant (generation license)?

    (i) Exploration (including drilling): While drilling for exploration does not require a license, if there is any evidence that the drilling has had a material impact on the yield, temperature or composition of geothermal fluid, the local government authority may order the party conducting such drilling to take any necessary measures to remedy such impact. 

    (ii) Exploitation (for drilling and use of geothermal resources): The local government authority can revoke the license/approval for drilling and/or use of geothermal resources if:

    1. In the case of a drilling license, it is determined that the drilling will have an impact on the yield, temperature and composition of thermal fluid.
    2. It is determined that the facilities do not meet the required technical criteria for prevention of accidents caused by natural gas.  
    3. In the case of a drilling license, it is determined that there are risks of damage to public interests (e.g. landslide, overflow or land subsidence). 
    4. The license holder has violated the Hot Spring Act or governmental orders under the Hot Spring Act.
    5. The license holder is not in compliance with the conditions of the license/approval. 

    (iii) Power plant: Once the construction of a geothermal power plant is approved, there is no way to revoke the approval. However, METI may order a power plant operator to suspend or restrict its use of the power plant if the power plant does not meet the required technical standards.

  • 8.3 Can the license granting authority set forth conditions into licenses which provide for (i) stricter terms and conditions of licensees or (ii) more lenient terms and conditions for licensees, when such terms and conditions (whether stricter or more lenient) are not otherwise provided for by law?

    It is possible for the license granting authority to impose additional conditions in licenses which provide stricter terms and conditions for licensees, e.g. in connection with health and safety requirements, preservation of thermal water, or prevention of accidents. However, the license granting authority is not allowed to grant more lenient terms and conditions for licensees.

  • 8.4 What remedies does the License granting authority have in order to enforce compliance to the terms and conditions of a license, other than by revoking the license?

    If the licensee is not complying with the terms and conditions of the drilling license or the license for use of geothermal resources, the license granting authority may revoke such licenses.  

    The license granting authority may also issue an emergency order to the licensee to take measures to preserve thermal water and/or prevent accidents caused by combustible natural gas, or otherwise to protect public interests when imminently necessary to prevent disaster caused by flammable gas emitted in connection with drilling or use of geothermal resources. Failure to comply with such an order is punishable by a fine of up to 500,000 yen and/or imprisonment for up to 6 months.  

  • 9. Regulatory and information obligation
  • 9.1 Briefly outline the surveillance carried out by the regulatory authorities during the license period, e.g. with regards to reporting duties and/or on-site visits.

    (i) Exploitation: A license granting authority may impose reporting duties on the licensee (e.g. periodic monitoring and reporting regarding geothermal resources) and/or carry out on-site inspections during the license period. 

    (ii) Power plants: As noted above, the licensee is required to periodically undergo inspections of the power plant by the regulator. The regulatory authority may (i) require the licensee to submit reports on its business and financial condition, and (ii) conduct on-site inspections at the licensee’s offices, in each case to the extent necessary for the enforcement of relevant regulations.

  • 9.2 Which information is required to be submitted to regulatory authorities during the license period for the holder of a license for:
       (i) exploration,
       (ii) exploitation,
       (iii) power plant (generation license)?

    (i) Exploration (with drilling) and exploitation: The regulatory authorities may require reports in their discretion. The following information is typically required to be submitted to the regulatory authorities:

    • Condition of facilities being used for the exploration or exploitation of geothermal resources
    • Natural gas emissions
    • Yield, water level, temperature and composition of geothermal fluid

    (ii) Power plants: The following information is required to be submitted to the regulatory authorities:

    Information regarding the status of construction, operation and maintenance, financial statements, information regarding safety operations and procedures, implementation of inspections, levels of monthly power generation and power transmission.

  • 10. Power purchase agreements
  • 10.1 Are general terms and conditions, such as duration of Power Purchase Agreements regulated? If no, are there any soft law or general recommendations in place in your jurisdiction?

    Not regulated. METI has issued a model power purchase agreement that has been made available to the public. However, there is no requirement for mandatory use of such model power purchase agreement.

  • 10.2 What is the permitted or general duration of PPA's?

    There is no mandatory maximum or minimum duration of PPA’s. METI’s model power purchase agreement includes guidance that the duration of the power purchase agreement should not exceed the period during which the power purchase price is guaranteed under the FIT scheme (FIT duration – 15 years for geothermal). Actual practice varies across the country. Some electrical power companies have model form agreements stipulating that the agreements will have an initial term of one year which is subject to renewal thereafter. Other electrical power companies have model form agreements stipulating that the agreements will expire at the end of the FIT duration.

  • 10.3 Are public and/or national regulatory authorities involved in any way in forming the terms of PPA's, either directly or indirectly?

    No. Please see above regarding METI’s model power purchase agreement.

  • 11. Incentives
  • 11.1 Is there any governmental support or funding available for exploration activities?

    As noted above, METI, through JOGMEC, subsidizes surveys for the exploration of geothermal resources (surface surveys and well drilling surveys) by up to 75% of exploration expenses. If a survey indicates a high potential of geothermal resources, the governmental agency also may provide a minority equity investment to project companies conducting promising exploration in an amount up to 50% of exploration costs.

  • 11.2 Are there any incentives offered by the government or local authorities for utilization of geothermal energy? If yes, in what form (e.g. tax and/or feed-in tariffs) and what are the maximum amounts permitted?

    FIT applies to geothermal power generation. Currently, the FIT price will be 26 yen + tax per 1kWh at newly constructed geothermal power plants generating 15,000kW or more, and 40 yen + tax per 1kWh at newly constructed geothermal power plants generating less than 15,000kW.  The FIT duration is 15 years in all cases.

    Currently, temporary tax favourable treatment will also apply to the capital expenditure for construction of advanced geothermal power plants.  Business operators can benefit from the accelerated depreciation (20% per year) of relevant facilities or equipment.

  • 11.3 What requirements must the project fulfil in order to be eligible to receive such incentives?

    In order to be eligible for FIT, a business operator must obtain approval of its business plan from METI by fulfilling the following requirements:

    1. The business operator has entered into a PPA with an electricity company.
    2. METI finds that (i) the business plan facilitates the use of power generated from renewable resources, (ii) the business will be implemented smoothly and with certainty and (iii) a stable and efficient power generation is expected.
  • 11.5 In the case of production of electricity from geothermal, are there any incentives/rewards for utilizing the geothermal energy for other than producing electricity, such as waste heat?

    None.

  • 12. Participation and authority of indigenous people
  • 12.1 Are the rights of indigenous peoples in connection to geothermal resources regulated?

    There are no regulations preserving the rights of indigenous people in connection with geothermal resources in Japan. However, some local government authorities require applicants to hold explanatory meetings with existing geothermal resources holders or to obtain the written consent of such existing geothermal resources holders to the intended activity (exploration, exploitation, etc.).

  • 12.2 To what extent are indigenous municipalities involved in the process of granting licenses?

    There is no system expressly permitting indigenous people to be involved in the process of granting licenses. However, some local governments and municipalities may adopt local laws imposing additional requirements for obtaining drilling licenses or operating power plants.

  • 13. Alteration of law and regulation
  • 13.1 What are the principles regarding retroactivity of laws and regulations, can changes in such rules affect license holders?

    Retroactivity of laws and regulations is expressly prohibited with respect to criminal law, but is permissible under civil law and public laws. In theory, retroactive changes to the geothermal licensing regime discussed herein could negatively affect license holders, although such an occurrence would be very rare.

  • 14. Taxation and capital controls
  • 14.1 How does taxation in the sector affect license holders?

    There is no special tax imposed on the sector other than general taxes such as corporate income tax and enterprise tax. Please see above regarding the temporary tax treatment.

  • 14.2 Please describe and provide information on the applicable tax rate and resource tax.

    The current tax rate of corporate income tax (national) is 23.4% in general.  Local tax varies depending on the size and location of a company. There is no resource tax.

  • 14.3 Is the sale of energy subject to VAT?

    Both the sale of geothermal resources and the sale of power are subject to VAT (consumption tax).

  • 14.4 Is VAT refundable and what is the procedure for VAT refunding?

    VAT (consumption tax) paid by a corporation or a sole proprietor is refundable through the filing of a consumption tax return.

  • 14.5 Is the flow of foreign capital restricted with capital controls? If so, briefly describe the nature of such controls.

    No, unless an economic sanction is imposed. 

  • 15. Environmental Impact Assessment
  • 15.1 What demands are there regarding environmental impact assessment prior to exploration, exploitation and or production of geothermal energy?

    (i) Exploration and exploitation: Neither exploration nor exploitation requires any environmental impact assessment (EIA).

    (ii) Power plants: An EIA is required prior to the construction of any geothermal plant that (i) is intended to have a power output of 10,000 kW or more, or (ii) is intended to have a power output of 7,500 kW or more to the extent its environmental impact may be significant. In the EIA process, a developer of a geothermal power plant will assess environmental matters such as air quality, noise, vibration, malodor, water quality and water level, topography, geological features and soil, ecosystem of animals and plants, landscape, waste materials, greenhouse gases, and radiological dosage. A draft EIA is subject to public comments and the prefectural governor’s comments. Upon reflecting comments from the licensing authorities, the EIA is finalized.

  • 16. Other regulatory requirements or permits needed
  • 16.1 What other licenses are needed in order to commence exploration, exploitation and/or production with geothermal energy?

    Depending on the location of the exploitation and production, additional licenses and permits may be required. Such permits include permits to use lands within a national park and permits to develop forestry areas.

  • 16.2 Which other regulatory requirements are in place, including but not limited to the need to provide insurances or guarantees, in connection with the commencing or continuing of exploration, exploitation and/or production of geothermal energy?

    No regulatory requirements other than those discussed above are in place.

  • 17. Legislation
  • 17.1 Have there been any recent amendments to the legislation for licensing, exploration and/or exploitation of geothermal energy in the last 15 years? If so, have these amendments made a noticeable impact on the increase or decrease of production of electricity from geothermal resources?

    None.

  • 17.2 Have any other factors made a strong impact on the production of electricity from geothermal in the last 15 years? If so, for what reasons.

    In 2012, the FIT regime was implemented for geothermal power production.

  • 17.3 Is there a specific legislation in place regarding geothermal extraction?

    As noted above, the Hot Spring Act governs the drilling license regime.

  • 18. Alternative or cascade use of resources
  • 18.1 When applying for a licence, is it possible to apply for one license or authorization, which provides for multiple or cascade use of the resource, e.g. direct and indirect utilization (generation of electricity, district heating and cooling)?

    No.

  • 18.2 Could mineral extraction from geothermal fluid be included under such cascade usage clauses?

    No. Licenses for mineral extraction are separate from the drilling licenses.

  • 19. Water rights
  • 19.1 Once an exploitation license has been granted for the operation of a power plant, along with access to fresh water for power plant operation, can the licence allow for sales and distribution of fresh water to local communities?

    Answer not provided.

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B B A

v. 1.0., 13 July 2018

 

This Privacy Policy is based on the current Icelandic Privacy Act no. 90/2018, as well as on the General Data Protection Regulation no. 2016/679 from 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, also known as ,,GDPR’’.

 

  1. INFORMATION ABOUT US

BBA Legal ehf., Katrínartúni 2, 105 Reykjavík, reg. no. 661098-2959 (also referred to as ‘’BBA’’ and ‘’we’’’) is the controller of any personal information that we process in connection to the legal services we provided to our clients.

The aim of this Privacy Policy is to provide our clients with information about the purpose and legal basis for the processing of personal data and inform clients about their rights in relation to such processing. If you have any further questions or observations to this Privacy Policy please refer to the Supervisor of this Privacy Policy by mail or email. The Supervisor will respond to your inquiry as soon as possible in writing.

BBA Legal ehf.  
Katrínartún 2     
105 Reykjavík    
c/o Sara Rut Sigurjónsdóttir        
email: sara@bba.is

 

  1. TYPES OF PERSONAL INFORMATION WE COLLECT

Personal information means any information that can be used to directly or indirectly to identify a specific individual.

BBA collects and processes certain personal information for the purposes of providing legal services to clients.  Depending on whether you are a client of BBA or whether you are representing a legal person that is a client of BBA.

The following are examples of personal data that BBA processes of individuals that are clients of BBA:

  • identification information of the individual that is a client, such as name/that is, identification number and domicile;
  • communication information, such as a telephone number, email and communication with a client;
  • financial information;
  • personal identification, such as a copy of a passport or drivers licence; and
  • other personal information that an individual provides us with in connection to legal services.

The following are examples of information about individuals that represent a client who is a legal person or an individual that is in another way a contact for a client:

  • contact information, such as the name of the employee, the name of the legal person that the employee works for and title; and
  • communication information, such as telephone number, email and communication with an employee.

It shall be noted that providing personal data is always optional for a client. If certain information is not provided it may affect BBA’s ability to provide legal advice.

In general BBA collects personal information directly from a client or a representative of a client. In some instances, the information may be provided by third parties, such as the National Register of Iceland, Property Register of Iceland, CreditInfo, Keldan, the Directorate of Internal Revenue, banks or other financial companies, District Courts, District Commissioner and public authorities.

BBA may in some cases collect data through website visits to the Company’s website, www.bba.is, including information regarding the location of the individual that opens the website, the type of browser that is used and general information regarding traffic on the website.

 

  1. LEGAL BASIS FOR COLLECTION

The processing of personal data that BBA holds depends on the purpose of the collection of personal data. For example, BBA processes personal data of a client to:

  • fulfil our contractual obligations of providing legal services;
  • ensure the interests of our client or other obligations in connection to the legal services we provide;
  • fulfil legal obligations;
  • safeguard the legitimate interests of BBA, particularly in relation to asset and security management and marketing, such as debt collection, managing the clients, marketing etc.

If a client has provided its consent to BBA for the processing of personal data for a specific purpose then consent is the legal basis for processing. The client can withdraw its consent at any time when the processing of personal information is based on consent. Further, it shall be noted that the withdrawal of consent does not affect the legality of the processing before the withdrawal of consent.

 

  1. DISCLOSURE OF PERSONAL DATA

The employees of BBA have access to personal data to the extent necessary to fulfil our contractual obligations towards our clients. Personal data may be delivered to third parties that process data on behalf of BBA or provide services to us. Those parties are for example IT system and software providers, banking and financial service providers as well as debt collectors.

In some instances, BBA has a legal obligation to disclose a client’s personal information to regulatory authorities, law enforcement agencies, district courts and other governmental bodies.

It shall be noted that the attorneys employed at BBA are bound by a legal duty of confidence regarding all information they receive according to Article 22 of Act no. 11/1998, except if they have a legal obligation to disclose information or the client has provided consent for such disclosure. Other employees are also bound by a similar confidentiality requirement. 

 

  1. DATA TRANSFERS OUTSIDE THE EUROPEAN ECONOMIC AREA

GDPR is applicable in all countries within the European Economic Area (,,EEA area’’) and data transfers within the EEA area are unlimited if based on an appropriate legal basis. GDPR restricts data transfers to countries outside the EEA area, including the United Stated. BBA uses the services of providers in the United States and transfers data to the United States for example, in relation to the monitoring of our website. As a data controller BBA is responsible for ensuring that our clients personal data is only transferred to parties that provide adequate protection to clients’ personal data. Therefore, BBA only transfers personal data to parties certified as Privacy Shield members or parties who have provided appropriate safeguards such as standard contractual clauses.

 

  1. DATA RETENTION

Personal information is generally processed and retained as long as necessary to fulfil contractual obligations to clients, legal obligation and legitimate interests of BBA. When data is no longer necessary to fulfil contractual obligations or legal obligation they are deleted. However, BBA may retain personal information relating to legal services for a longer period when obliged by legal and/or regulatory requirements, such as limitation periods for taking legal action and accounting requirements.

 

  1. DATA SUBJECT RIGHTS

Individuals enjoy certain rights in relation to the processing of BBA on personal data. They include the right to:

  • request information about how BBA processes personal data and receive a copy of the information;
  • request erasure of personal data, rectification of inaccurate personal data or request that BBA complete incomplete personal data;
  • request to receive personal data in a structured, commonly used, and machine-readable format and to have them transferred to another party.

It shall be noted that BBA is permitted in limited circumstances to deny that personal data is erased, transferred or that access to data is provided. BBA will ensure that the personal data of each client is updated and reliable.

A client also has the right to lodge a complaint with a supervisory authority if he considers that the processing of BBA infringes or is not in compliance with the applicable legislation. Further information on the rights of data subjects are provided by the representative of the BBA Privacy Policy (please refer to our contact information in section 1).

 

  1. PROTECTION OF INFORMATION

BBA has taken appropriate and reasonable steps to ensure that all personal data is protected from misuse, interference and loss, as well as unauthorised access, modification or disclosure. The measures taken to protect personal data include:

  • implementation of technical and organisational measures designated to ensure continued confidentiality, continuity, availability and load resistance of processing systems and services;
  • managing the access of individuals to our premises;
  • managing the access of employees and others to systems that contain personal information;
  • ensuring that third parties who have access to the personal data of clients have made appropriate security safeguards to protect personal information; and
  • limiting the retention period of the personal data of clients.

 

  1. PRIVACY POLICY AMENDMENTS

This Policy will be updated regularly in accordance to the changes made by BBA in relation to the processing of personal data. We encourage you to review this policy on a regular basis to be informed about how we use and protect your personal data.