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Posts from the ‘Investing and Legal Issues’ Category

Jul 9

New development at Landsnet

The Icelandic electricity grid is highly modern and extraordinarily reliable and the Icelandic Transmission System Operator, Landsnet, is world-renown for its secure electricity supply to its customers. This fact has been confirmed in numerous international reports, where Iceland’s electricity supply is ranked among world’s most secure (see for example IMD’s and WEF’s World Competitiveness reports).

Landsnet owns and operates all bulk electricity transmission lines as well as all main substations in Iceland. The company is owned by four electricity generating companies, where the state-owned power company Landsvirkjun has almost a 65% share.

The total length of the transmission lines is currently close to 3,200 km. The power flow is always illustrated in real time on Landsnet’s website. To meet growing demand, the grid is constantly being developed and maintained at a high standard, which includes rebuilding older lines and adding new ones. The grid is free of serious bottlenecks and there are no permanent system constraints in Landsnet’s grid.

Although Iceland is already the world’s largest electricity producer per capita, the country has substantial hydro- and geothermal resources unharnessed. This includes numerous very economical options, with minimum environmental effects.

According to a special governmental plan for energy (Master Plan for Hydro and Geothermal Energy Resources) several new renewable energy projects can be expected in Iceland in the forthcoming years. This will call for major investments, not only in electricity generation but also in the construction of new transmission lines.

Recently, Landsnet introduced its vision or ideas towards strengthening the grid (as shown on the map above, with the title Next generation grid). However, this is a plan that the company will develop in full accordance with the Icelandic government and its energy policy. It is expected that the Icelandic parliament (Alþingi) will soon vote on the Master Plan, making it clear which new energy- and transmission projects will be emphasized in the coming years.

In addition to the expected build up in the Icelandic transmission system, a high voltage direct current cable (HVDC) is currently being considered between Iceland and Europe. Such a cable would obviously affect the Icelandic TSO. In early July (2012) the Icelandic Minister for Industry, Ms. Oddný Harðardóttir, appointed a working group to scrutinize the feasibility of such a interconnection. Of course Landsnet has a representative in this group, which will look carefully at all the relevant issues, such as the technical, financial, legal and social aspects.

However, the next major step for Landsnet is not regarding the transmission system, but has to do with the electricity market. Within a couple of months, Landnet will be establishing a new efficient electronic market for electricity trading. We at Askja Energy will soon be taking a closer look at this new Icelandic electricity market, that will have strong similarities to for example the Elbas Intraday Market at Nord Pool Spot.

May 30

Strong Drivers

Iceland’s green energy portfolio and the European legal framework offer investors and industries possibilities to gain from some of the strongest drivers and incentives affecting the world’s energy sector.

Rising world energy consumption, growing demand for renewable energy, concerns about global warming, and international geopolitics are all important drivers affecting the world’s energy sector. These concerns are for example reflected in the European Union’s (EU) ambitious renewable energy policy.

EU’s energy policy includes binding targets for all the EU’s member states regarding more renewable energy and less carbon emissions. This policy is one of the drivers making Iceland’s renewable energy  more competitive than ever before.

For more information go to our legal section.

May 30

Energy Security

Iceland’s stable renewable energy sources and secure and reliable electricity supply create competitive advantage and strong incentives for industries to locate in Iceland.

As Iceland is a member state of the European Economic Area (EEA), the energy business environment is based on the EU’s regulatory framework. This means that the arrangements applying to the single European market extends to Iceland.

Therefore EU and EEA firms can invest, for example, in industries and/or energy production in Iceland. Iceland is also participating in EU’s carbon trading scheme and has same kind of legal framework as the EU member states regarding electricity production and distribution.

Because of Iceland’s unharnessed renewable energy sources, it may be feasible to link Iceland and Europe with a green high voltage electricity cable. Recently, the world has been experiencing fast advancement in HVDC-transmission technologies, making this a real and an interesting possibility.

You will find more information about the technology and the business model behind such a connection under the transmission menu. Also, you may be interested in our investment section.

May 30

Positive Winds

Iceland may be a perfect setting for extensive utilization of wind energy.

Wind farms in Iceland can be expected to be almost 100% more efficient than in Europe or USA (according to early research). Due to low population density and extensive areas of land with few natural or manmade barriers, there is plenty of space for large wind parks.

Large-scale wind power utilization in Iceland may be especially attractive in connection with a subsea electrical HVDC-cable between Iceland and Europe. Instead of constructing very expensive offshore wind farms outside the coast of countries like Denmark, Germany, Netherlands and United Kingdom, investing in wind power in Iceland may be both less costly and offer lower political thresholds.

You can find information about wind energy potentials in Iceland on our wind page.

May 30

Forthcoming Projects

The Icelandic government has recently worked out a comprehensive Master Plan for Hydro and Geothermal Energy Resources in Iceland.

The new Master Plan is a pathway towards new renewable energy projects. At the same time it aims at protecting numerous areas from development.

According to the plan, several new hydroelectric and geothermal power plants can be expected to be constructed in Iceland in the forthcoming years. The upcoming power projects are further described under our renewable sources menu.

Environmental consciousness is always an important factor regarding utilization of renewable energy sources in Iceland. For more information about environmental protection in Iceland go to our environmental page.

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