Energy in the Faroe Islands is produced primarily from imported fossil fuels, with further contributions from hydro and wind power.

Electricity is produced by oil, hydropower and wind farms, mainly by SEV, which is owned by all the municipalities of the Faroe Islands.

[1] The Faroe Islands are not connected by power lines with continental Europe, and thus the archipelago cannot import or export electricity.

[4] The municipality-owned company SEV is the main electricity supplier in the Faroe Islands with 90% of the total production, and private producers supplying the rest.

[21][22] Also adjacent to Húsahagi and Gellingakletti is the Flatnahagan wind farm with 6 Enercon turbines, scheduled at 66 GWh per year when ready.

[31][32] Planners also consider converting the existing hydropower[33] to pumped-storage hydroelectricity,[17] as rain and wind are high in winter and low in summer.

[17][40][41] This occasionally happens when rain and wind matches demand, and the diesel power plants are turned off.

[48][49] Due to extreme weather conditions and its lack of interconnections, the Faroe Islands experience one to three total blackouts annually, a ratio higher than that of continental Europe.

The Faroe Islands' first solar park was installed with 250 kW capacity in Sumba in late 2019, expected to produce 160 MWh/year (i.e. a capacity factor of 7.3% and equivalent to 35 tons of oil), from diffuse light for 1,000 hours per year; mainly in the summer when rain and wind are low.

[76][77][9][41] In 2014 50.8% of the electricity production of SEV in the Faroe Islands came from green energy like hydro (mostly Eiði and Vestmanna)[43] and wind, while 49.2% was produced by the thermal power plants, which was 12.4% less than in 2013.

[40][86] Since energy consumption has been rising steadily during the last few decades,[5] the Ministry of Trade and Industry has conducted a study for the future development of electricity production projects.

[16] Apart from the development of new hydropower plants and wind farms, the study proposes the investigation of the possibility to produce electricity from LNG and biogas.