Landsvirkjun, the national power company, is planning to double its electricity production by 2025 with energy harnessing projects which will cost almost ISK 40 billion (USD 355 million, EUR 242 million) per year. Dividend payments could amount to ISK 120 billion (USD 1.1 billion, EUR 730 million) per year.
An Icelandic power plant. Photo by Páll Stefánsson.
These operations will increase production from 18 terawatt hours per year to 30-35 and it is estimated that 10,000 jobs can be created, Fréttabladid reports.
CEO of Landsvirkjun Hördur Arnarson stated the company’s long-term strategy will lead to 15 years of economic growth, reasoning that increased demand for energy in the international economy, the fear of harnessing nuclear energy after the Japan disaster and emphasis on renewable energy resources will create immense opportunities for Landsvirkjun in this period.
“We envision that the period’s economic growth will be driven by industrial development and construction of power plants and that a varied industry will be created along with powerful development of knowledge in relation to energy harnessing,” Arnarson commented.
“We imagine that electricity production will be doubled compared to its current level and that electricity prices to industries will increase in line with price developments in Europe,” he added.
“Dividend payments and tax payments from Landsvirkjun will be between four and eight percent of the gross domestic product, which depends of course on how things evolve in our neighboring countries,” Arnarson concluded.
The strategy does not include harnessing energy in disputed areas. In fact, Landsvirkjun is considering energy resources that have been left untouched so far, such as wind energy, as Vidskiptabladid reports.
“It is a myth that Iceland is too windy for windmills,” said Úlfar Linnet, a specialist at Landsvirkjun, who is currently looking into the option. The first step is to map the wind power in Iceland with a so-called wind atlas.
Today, harnessing wind energy is more expensive than harnessing hydropower but that might change in the future, Linnet speculated. Also, these two energy resources go together well.
Wind power cannot be controlled because the energy is controlled by the weather and electricity cannot be stored so a more stable energy resource is required alongside wind power.
“In the short term, wind power is very changeable but when the wind power is looked at year after year the wind is more even than the flow of rivers,” Linnet explained as to why these two energy resources complement each other.
Click here to read more about windmills being an option for Iceland.