Saving Iceland

Landsvirkjun, Iceland’s national energy company, plans to build fourteen power plants in the next 15 years; ten hydro dams and four geothermal plants, costing between 4,5 and 5 billion US dollars. If the plans go ahead Landsvirkjun will increase its electricity production by eleven terawatt hours (TWh), resulting in annual production of 40 TWh. “A new Kárahnjúkar dam is on the cards,” said Katrín Júlíusdóttir, minster of industry, when discussing  energy plans in parliament recently.

Landsvirkjun’s new plan was presented at the company’s annual general meeting, which took place on April 15th. According to the company’s director, Hörður Árnason, the planned power plants are to be built in several rivers, including Þjórsá, Tungnaá and Hólmsá, as well as geothermal areas in the north of Iceland. The construction of Búðarháls Dam in Tungnaá has already started and Landsvirkjun plans to start energy production there in 2013, whereas all the other options are still being looked at in the making of a framework programme concerning the use and protection of Iceland natural resources. Read More

A decision by Svandís Svavarsdóttir, Minister of Environment, to reject the construction of a dam in Urriðafoss waterfall in Þjórsá river, has been ruled illegal by Iceland’s supreme court. Whilst Svavardóttir and her comrades in government accept the ruling, and say the Minstry of Environment now has to look into the case and examine the legal environment, the right wing opposition in parliament, along with heavy industry lobbyists, demand the ministers’ resignation, claiming that she has delayed all construction in the area for two years. People living by Þjórsá have announced that these statements are wrong and ask for examples, while a MP accuses Landsvirkjun (the national energy company) of bribery. Read More

Rio 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 31^st 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. Read More

He Guoqiang, party secretary of the Central Commission for Discipline Inspection of the Chinese Communist Party, is visiting Iceland along with a delegation of business personale. They will be meeting with the country´s president, Ólafur Ragnar Grímsson, prime minister Jóhanna Sigurðardóttir and the foreign minister, Össur Skarphéðinsson, along with the heads of certain companies they´re interested in cooperating with.

On the 9^th of June, he and his delegation attended a meeting with heads of Landsvirkjun (National Power Company) where a letter of intent was signed on behalf of Landsvirkjun on one side, one of China´s biggest contracting companies, China International Water & Electric Corporation (CWE) and the government owned Export-Import Bank of China (Exim Bank) on the other. The letter regards participation on tender offers to harness energy in Iceland. The letter does not commit any of these partners to any deals, but Landsvirkjun claims the letter displays their interest in doing business with these partners and CWE´s interest in bidding on the Búðarhálsdam project, with Exim Bank willing to finance some of CWE´s projects for Landsvirkjun. Read More

Rio Tinto Alcan is still planning to construct a new smelter in Iceland, as well as in Canada, Malaysia, Saudi Arabia, Oman and Cameroon. In total the mining and metals giant is planning to expand it’s aluminium production capacity by 2.6 million tons. All the projects are projected to start between 2011 and 2014. Rising energy prices are driving fossil fuel powered smelters out of business, report financial news analysts Bloomberg. Thus Rio Tinto are looking at accelerating hydro-powered smelter construction.
Rio Tinto has thought to construct a new smelter in Thorlakshöfn or Keilisnes. Landsvirkjun have said they do not wish to construct more power plants for another new smelter in South West Iceland, but apparently Rio Tinto Alcan are still counting on it. Currently Budarhals dam in Tungnaa is being constructed to increase production in RTA’s Straumsvik smelter with 40.000 tons.