Project Development & Licensing take typically 9 months to 2 years.

In Norway, the Water and Energy Directorate identifies prospective hydropower projects, classifying them according to size, power production potential, risk and ecological sensitivity. ‘Smallscale Hydropower’ is generally defined as projects with production capacity below 10MW, which gives certain tax and license cost advantages. This is the sector in which Odelskraft specialises.

Project Development

Most landowners are at least aware of the hydropower potential of their property, but often don’t have the industry knowledge to scope the potential of projects, or to manage the full process. Odelskraft has many years of experience in the primary feasibility study, where hydrology, construction costs and likelihood of license are measured and estimated. We literally ‘walk the river’, or ‘creek hunt’ with the landowner, to identify potential pitfalls, such as archeological sites or ecologically sensitive fauna and flora, and to establish tactical knowledge of the project area. We do not simply rely on aerial survey or standard mapping data, because we know that the combination of the landowner’s local knowledge and a ‘boots on the ground’ strategy produce the highest quality decisions about whether or not to proceed with a project, at the earliest possible opportunity.

The most important parameters that are established in the early phase are:

  • risk class
    • which governs the level to which the project must be licensed and engineered
  • likelihood of success of licence exemption application
    • smaller projects in low risk categories are likelier to achieve ‘licence exemption,’ which lowers development costs and shortens build times
  • total project finance estimate

The output of the Project Development sub-process is a ‘Landowner Agreement,’ where the landowner gives Odelskraft exclusive permission to develop the project, based on the provisional licence, construction cost and production parameters at this stage.

Licensing

The Norwegian Water and Energy Resources Directorate requires all smallscale hydropower projects to submit an application for a Development License , irrespective of size or risk class, and whether or not a ‘licence exemption’ will likely be granted.

The criteria for acceptance include socio-economic benefit to the local community, ecological and cultural impact, catastrophe and flood risk, and connection requirements to the national grid (where necessary). These criteria are mostly objective and strict, but some subjectivity is inevitable when addressing the inescapable impact that any power production project must have on the natural environment. For this reason, Odelskraft eliminates projects that are likely to raise considerable objections at the earliest possible moment, normally during the ‘desktop’ phase of the previous ‘Project Development’ sub process. Although this can be frustrating for a landowner with an otherwise ‘perfect project’, such objections inevitably lengthen the time required for the Directorate to assess the application and greatly increase the likelihood of rejection.

Odelskraft therefore focuses exclusively on projects with high probability of acceptance.

Many smallscale hydropower projects enjoy a remote location that decreases the catastrophe risk, due to non-proximity of civil infrastructure and domestic dwellings. Through careful selection of such projects, we are often able to obtain a ‘Licence Exemption,’ which is highly advantageous for the project timelines and finance. In such cases, the Directorate approves the Development License, but requires a less onerous bureaucratic and engineering process, such as providing a simpler level of ‘as built documentation,’ rather than very detailed engineering and environmental planning documentation, which introduces delay into the engineering and construction sub-processes.



Once the project has passed through Licensing, detailed Engineering planning may begin.