Magma Energy and Iceland’s Finance Ministry in Talks Skip to content

Magma Energy and Iceland’s Finance Ministry in Talks

By Iceland Review

Canada’s Magma Energy, which is planning to become lead investor in Sudurnes energy company HS Orka, will participate in reviewing the current agreement on renting geothermal energy resources on Reykjanes peninsula and is currently in talks with Iceland’s Ministry of Finance.

Harnessing geothermal energy in Iceland. Photo by Páll Stefánsson.

According to Morgunbladid’s sources, the government wants the reviewing of the agreement to lead to a shorter rental period and a higher rental price.

With these changes, Icelandic authorities want to ensure that the majority of the profits from HS Orka’s geothermal energy resources will go to the Icelandic state.

CEO of Magma Energy Ross Beaty discussed the matter in a private meeting with Minister of Finance Steingrímur J. Sigfússon on Wednesday, which was the second time they met.

Beaty allegedly agreed that the reviewing of the agreement would be in consistency with the conclusions of a committee established by the Prime Minister’s Office on the renting of hydro and geothermal energy resources in public ownership.

The committee, which is chaired by Supreme Court Advocate Karl Axelsson, has been operating since last year and was supposed to submit its report on June 1.

However, that was not the case, and the committee is now expected to reach a conclusion on the matter no later than on December 31.

According to the original agreement, HS Orka would rent its energy resources to Magma Energy for 65 years with the possibility of extending the rent for another 65 years.

The estimated annual price for harnessing these energy resources, which will go to the landowners on Reykjanes, is ISK 72 million (USD 566,000, EUR 360,000) for HS Orka’s entire current electricity production, according to a statement sent by CEO of HS Orka Júlíus Jónsson to the media earlier this week.

Click here to read more about this story.

Sign up for our weekly newsletter

Get news from Iceland, photos, and in-depth stories delivered to your inbox every week!

* indicates required

Subscribe to Iceland Review

In-depth stories and high-quality photography showcasing life in Iceland!