Ministry rejects million-kroner fine against Kupekraft
The Norwegian Water Resources and Energy Directorate (NVE) believed that the grid connection for the Kupekraft power plant in Sunnfjord was built before the licence was in place. As a result, NVE announced an administrative penalty of NOK 1 million in December last year.
The Kupekraft power plant is located in Årdal in Jølster, in Sunnfjord municipality. The power plant was granted a licence in 2018 and commissioned in 2022. It now produces around 25 GWh annually, corresponding to the consumption of approximately 1,250 households. Clemens Kraft owns Kupekraft.
Although a licence to build the power plant was in place in 2018, a separate licence is required to build the grid connection. The reason for NVE’s reaction was that construction of the grid connection had already begun without the power plant having this final licence. NVE believed this constituted a violation of Section 3-1 of the Energy Act: «Facilities for the production, conversion, transmission and distribution of electrical energy may not be built, owned or operated without a licence.»
Clemens Kraft disagreed with NVE’s assessment that the establishment of the temporary construction power supply took place without a licence. BKK Nett holds the area licence for the grid in the area, and the construction power connection to Kupekraft was installed by agreement with BKK Nett, which was also to be responsible for operating the connection. Clemens Kraft argued to the Ministry of Energy that the development was therefore carried out in accordance with BKK Nett’s area licence.
In its assessment, the Ministry of Energy based its conclusion on the fact that, since BKK Nett, as the licence holder, assumed responsibility for constructing and operating the grid facility, it was not necessary for Kupekraft to have a separate licence for this.
NVE also argued, with reference to Section 3-2 of the Energy Act, that Kupekraft was not entitled to build the facility in question under the area licence, because «an area licence holder may only build facilities that it is itself to own and operate». The Ministry of Energy says that the law does not impose such a restriction.
The Ministry concludes that Kupekraft has not violated the Energy Act and that there is therefore no legal basis for imposing an administrative penalty on Kupekraft.
– Clemens Kraft, the owner of Kupekraft AS, has strongly disagreed throughout with NVE’s grounds for issuing an administrative penalty in this case, and is therefore both relieved and pleased that the Ministry of Energy has established that Kupekraft did not violate the first paragraph of Section 3-1 of the Energy Act in this case. This is a very central provision of the legislation, of which we are highly mindful and which we always try to comply with when building new small-scale power plants. The Ministry of Energy’s conclusion that we have stayed within the law is therefore an important decision for us, says Knud Nørve, CEO of Clemens Kraft.