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The Icelandic energy sector is back on track

Construction of the new Búðarháls Hydropower Station in the southern highlands of Iceland is proceeding as scheduled.

Last week the President of Iceland, Mr. Ólafur Ragnar Grímsson, laid the cornerstone to the station’s powerhouse. The construction of this new power plant commenced in late 2010. The station will have two 47.5 MW turbines, with a total power of 95 MW. It will start operation by end of 2013 and by 2014 the station will produce 585 GWh of electricity annually.

The project is part of Landsvirkjun’s expansion following an agreement to provide an aluminum smelter of Rio Tinto Alcan (RTA) with more power. RTA has more than 40 years operating history in Iceland and is currently expanding its aluminum plant at Straumsvík in Southwestern Iceland. This increases RTA’s electricity demand in Iceland by 658 GWh annually.

When the financial crises hit Iceland in late 2008, a period of economical difficulties followed and foreign investment became minimal. Iceland’s credit rating was downgraded and as the power company Landsvirkjun is state owned this downgrading was negative for the company.

However, the Icelandic economy soon started to show positive signs. In early 2011 Landsvirkjun secured full funding for the Búðarháls Project. This includes two loans from the Nordic Investment Bank (NIB) and the European Investment Bank (EIB), respectively. Each of the loans is 70 million USD. In addition, Landsvirkjun successfully issued bonds for 100 million USD through an Icelandic bank. It certainly seems that Landsvirkjun is back on the track.

Icelandic sustainable energy management solutions

Icelandic startup ReMake Electric was recently awarded the 2012 Europe Early State Investment Opportunity Award by Frost & Sullivan Market Research and Consulting.

According to Frost & Sullivan, ReMake Electric has demonstrated excellence in its intellectual property, the experience of its management, its funding history and quality of its investors.

“ReMake Electric provides sustainable energy management solutions that help customers optimise their energy usage,” Frost & Sullivan Senior Analyst Vinod Cartic states in a press release on the company’s website. “Simple, innovative and versatile solutions promote energy conservation, while enabling customers to make economic gains.”

The firm excels in developing basic electrical metering products for energy consumption monitoring and analysis. It optimizes energy usage and creates savings on the energy bills of its customers, primarily based in Europe, through the development of electrical metering products. The company serves both residential and commercial customers, among them IKEA and Coca Cola.

In 2010 the company received the Golden Egg Innovation Award as the winner of the Icelandic Innovit innovation competition. Then, a total of 300 business ideas were submitted.

BMW and Icelandic energy in the media

Recently, there has been a lot of international media coverage about Icelandic energy issues.

This includes numerous news-stories about the decision of the flash German car maker BMW to move its high performance computing to a data centre in Iceland, powered by renewable energy. This will save around 3,600 tonnes of carbon emissions per year.

According to the news, BMW  is moving ten of its high performance computing clusters, consuming 6.31 GWh of energy each year annually, from Germany over to the Verne Global Data Centre in Southwest Iceland. The data centre uses electricity from 100 percent renewable sources – Iceland’s geothermal and hydroelectric generators.

Besides the carbon free renewable energy, Icelandic electricity is much cheaper than in any other OECD-country. Thus, BMW will save around 80 percent of the power costs of running calculations including crash test and aerodynamics simulations, as well as computer aided design and engineering calculations.

For more news about Icelandic energy issues, please go to our media-page.

Electricity statistics update 2012

The Icelandic Energy Authority has published statistics regarding the electricity industry in 2011. The publication is in Icelandic only (link to the pdf-file). Here are some of the key numbers:


TOTAL ELECTRICITY GENERATION:          17,210 GWh (2011)



Hydro Power 72.67%
Geothermal Power     27.32%
Fossil Fuels     0.01%
Total 100.00%



Hydro Power  1,884 MW
Geothermal Power     665 MW
Fossil Fuels     120 MW
Total 2,669 MW



Energy Intensive Industries 80%
General Consumption     18%
Other     2%
Total 100.00%


We will soon be offering more Icelandic energy data in our special data-section.

Tidal energy innovation

Recently, the Icelandic National Power Company Landsvirkjun started to prepare the constructions of the first large wind turbines in Iceland. In Iceland, emphasis is also being placed on the utilization of marine power. For example, the Icelandic Innovation Centre has been involved with development of both osmotic energy and tidal power projects. There are also examples of possible upcoming projects, especially focusing on tidal power.

Some of the fiords and bays in Iceland experience strong tidal currents. The tidal wave at Iceland rotates clockwise around the country in 12 hours and 25 minutes, arriving at the south. The mean speed of the wave is around 150 km/hour.l elevations in Iceland are greatest on the west coast, especially in Breiðafjörður where the difference between ebb and flood for mean spring tides can exceed 4 meters. Along the north and east coasts, this difference is considerably smaller, typically one to two meters.

Sjávarorka is an Icelandic firm that was established in 2001 with the main purpose to investigate the possibilities of utilizing tidal power and ocean currents around Iceland.  The company has been focusing is a specific site in the western part of Iceland where the difference between high and low tides is greatest. The plan is to use tidal turbines to harness the tidal current without constructing dams.

In mid-2011, Landsvirkjun decided to become a major shareholder in Sjávarorka, by becoming one of the owners of the company through investments. Since early 2012, Landsvirkjun has around 30 percent  stake in Sjávarorka. As Landsvirkjun is Iceland’s main energy company this may mean that research on Icelandic marine energy will increase substantially.  Here at Askja Energy we will be following the project of Sjávarorka closely and bring our readers news of interesting development of this and other marine energy projects in Iceland.

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