Jul 24 2010

Energy for Straumsvík Expansion to Come From Búðarháls-Powerplant

Map showing Búðarháls-powerplantRio Tinto Alcan (ISAL) has landed all the energy-related deals necessary for the company to start expanding it’s aluminum smelter in Straumsvík. In the middle of June, Landsvirkjun (National Power Company) and Alcan renewed their current deal on energy purchase between the companies. The renewal included an extension on purchase right up until the year 2036, along with an added purchase of 75MW of power, energy Alcan needed to secure to be able to act on their plans on expanding the smelters productional capacity by 40.000 tons a year. This expansion will not exceed the companies current boundaries, thus manouvering around any results from local referandums against the smelters expansion. As mentioned earlier, the expansion also requires these 75MW of power on top of all the energy Alcan is already receiving at bargain prices. But the deal does have some reservations, most prominently a demand that the uncertainity about the taxation of heavy industry in the country be settled before the 31st of August. This is a clear and blatant example of how the power-sector and aluminum lobbyists toy with the countrys government, that has never dared to resist or stand up to this kind of pressure, or blackmails as it is, of financial muscle, so the same should be expected in this case.

A week after the signing of the deal with Alcan, Landsvirkjun invited tenders on the construction of Búðarháls-powerplant and related constructions. The tenders close at the end of August, and construction is expected to be finished by the fall of 2013. Preperational work for the powerplant construction started earlier this year after this project had been pointed out by the government’s Letter of Intent with the Industry Unions as the most prominent project to create jobs in the country and revive the economy. Preperation is supposed to be finished by the 1st of December, and construction of the powerplant could begin at anytime after that.

In the middle of July Alcan made another deal, this time with Landsnet (National Power-Grid). A subsidiary of Landsvirkjun, concerning the transport of the newly purchased 75MW to the smelter in Straumsvík. That deal tied the final knot in securing the energy needed to power the expanded smelter, enabling Alcan to start the construction of the expansion and committing Landsnet to build the Búðarháls-powergrid and connecting the Straumsvík smelter to it before the end of 2013.

Búðarháls-powergridBúðarháls-powerplant will produce 585GW og power each year and will require a 7km2 large reservoir, Spoðöldulón, to be created with the construction of a 2km long dam over the river Kaldahvísl, just above where it meets the river Tungnaá. The picture on the right displays the planned Búðarháls-grid, the high voltage powergrid that will connect Búðarháls-powerplant to the powerstation at Sultartangi, that will have to be expanded to receive and distribute the new energy. The Environmental Impact Asessment (EIA) for the powerplant and grid was done several years ago by the Skipulagsstofnun (Icelandic National Planning Agency) overseed by Verkfræðistofan Hönnun (Mannvit), but these are the same offices that have done the EIA’s on areas that have been invaded and sacrificed on the altar of greed in recent years, and the results of these EIA’s is always supportive of further industrial build-up, usually without many restraints. Some of their newest ideas have included suggestions of lessening the negative impact of constructions by beautifying them in ways that can further the beauty of the environment instead of destroying it.

Current Grid ProjectsThis next picture displays all of Landsnet’s current projects, building and connecting powergrids mostly. The second one, taken from tenders released earlier in the year, shows all of the companies projects that were under preperation at the start of 2010, some of which are now under construction like Búðarháls. Planned grid projects 2010An interesting point in these plans, is the fact that the powergrid for lower-Þjórsá river and the connecting grid for an aluminum smelter in Bakki are on them, but these projects are still undecided and highly controversial.