Major Changes to Reykjavík Bus Routes

Strætó bus Reykjavík miðborgin umferð fólk

There will be major changes to Reykjavík bus routes in the coming months due to construction at Hlemmur, the main bus terminal in downtown Reykjavík. All bus routes in the area will be temporarily diverted and new end stops will be implemented on each route. When construction is complete, only four bus routes will stop at Hlemmur and there will be no central end stop for Reykjavík bus routes.

End stops move to Grandi, Skúlagata, and the University of Iceland

A notice from Reykjavík public bus service operator Strætó outlines the changes to routes due to the construction at Hlemmur. The end stops of routes 1, 2, 3, 4, 6, 16, 17 and 18 will move from Hlemmur to Skúlagata, Grandi and HÍ (University of Iceland).

Route 3 will use Grandi as an end stop. Routes 1, 4, 16, 17 and 18 will temporarily make their final stop in Skúlagata street, a new terminal station in the city. Routes 2 and 6 will temporarily end at the University of Iceland. All of the new routes can be seen in detail on the Strætó website.

Read more about public transport funding in Iceland and Reykjavík’s planned Borgarlína bus rapid transit system.

Electricity Shortage “Unacceptable” Says Environment Minister

Low cost of electricity in Iceland compared with the rest of Europe

Icelandic fish processing plants will need to power their operations with oil and diesel generators for the third winter in a row due to an electricity shortage, Vísir reports. This burning of oil and diesel cancels out all of the emissions saved by electric cars in Iceland thus far. Minister for the Environment and Natural Resources Guðlaugur Þór Þórðarson says the lack of green energy is unacceptable in a country that’s aiming for a green energy exchange.

Guðlaugur Þór says that the current shortage is the result of very few power plant construction projects in Iceland over the past 15-20 years. “This is not acceptable at all and we must do everything we can to resolve this as soon as possible,” he told reporters. The Minister criticised the red tape that delayed the approval of the construction of new power plant projects and called for streamlining the system.

Read More: 2021 Electricity Shortage Impacts Local Industry

Last June, the Environmental and Natural Resources Board of Appeal revoked the construction permit for the proposed Hvammsvirkjun hydropower plant in South Iceland, after the local council decided to review new information on the plant’s potential environmental impacts. The Board of Appeal emphasised that the National Energy Authority (Orkustofnun) had not followed the guidelines of the Water Council when preparing to issue a permit to the hydropower plant.

The Hvammsvirkjun plant would have an estimated capacity of 95 MW. For comparison, Iceland’s largest hydropower plants are the Kárahnjúkar and Búrfell plants, with respective capacities of 690 KW and 270 KW. Both were built to provide power to aluminium smelters. Hellisheiði Power Station is Iceland’s largest geothermal power plant, with a capacity of 303 MW.

Data centres use more electricity than Icelandic homes

There are also those who are sceptical of the need for additional power plants in Iceland, shifting the attention to energy-intensive industries that arguably contribute little to the country’s GDP. Snæbjörn Guðmundsson of the nature conservation organisation Náttúrugrið has expressed concern that the proposed Hvammsvirkjun hydropower plant would be used towards Bitcoin mining, a growing industry in Iceland. The National Power Company has stated that it would not build power plants for the express purpose of providing energy to Bitcoin mining companies.

Data centres (of which Bitcoin mining centres are a subcategory) in Iceland use 30% more energy than all Icelandic homes put together, and while the percentage of this energy that goes toward Bitcoin mining is not public knowledge, it could be as high as 90%.

New Housing Report Shows Increase in New Apartments

architecture Kirkjusandur apartments

The latest report on housing shows that the number of new apartments has increased significantly this year, and there is still momentum in the construction industry this year.

According to data from the Housing Registry of the Housing and Construction Authority, the number of apartments under construction has remained relatively stable since the beginning of the year and is well above the historical peak, with over 7,000 units. The number of completed apartments has increased significantly in both the capital region and rural Iceland compared to the same time last year, according to the agency’s data.

Read More: 4,000 Apartments Needed to Meet Housing Demand

The number of apartments at the first stage of construction increased by 36% since last year, according to the latest Housing and Construction Authority census from March. Additionally, statistics from Statistics Iceland show that activity in the construction industry has continued to grow rapidly this year at a constant level. There are as of yet no clear signs that the number of apartments under construction has decreased, though these numbers could be affected by rising interest rates.

Despite the increase in the population, it appears that the number of residents per apartment has decreased from the years 2018-2020, hopefully indicating that construction has kept pace with population growth. The housing report states that there doesn’t seem to be a significant shortage of apartments compared to the previous decade. The report also indicates that authorities will continue to support the supply of apartments, including ongoing funding for the public housing system, as announced in June.

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Luxury Hotel’s Impact on Protected Valley Raises Concerns

þjórsárdalur

The company building a luxury hotel and baths in the protected Þjórsárdalur valley has yet to negotiate payments for water usage at the site. The Icelandic Institute for Natural History called it a mistake to permit the development, as it entails disturbing the landscape. The company building the hotel is a subsidiary of the Blue Lagoon and holds a 40-year lease on the land.

The hotel and baths are being constructed within a protected area, on a plot owned by the state. The company Rauðukambar ehf., a subsidiary of the Blue Lagoon, is leasing the 130,000 square metre plot for just over ISK 400,000 [$3,000, €2,800] per month. Payments to the state for water usage are yet to be negotiated.

Prime Minister’s Office authorised construction

Since the construction is on public land, it was subject to the approval of the Prime Minister’s Office, which has authorised the project according to the conditions of the protected area. Prime Minister Katrín Jakobsdóttir herself was present at the official start of construction, digging the first shovelful into Rauðukambar mountain alongside the mayor of Skeiða- og Gnúpverjahreppur municipality, where the hotel will be located, and the developers.

The hotel is being built into Rauðukambar mountain, reportedly to minimize its visibility. The Icelandic Institute for Natural History has stated its opinion that the hotel and baths do not comply with the objectives of protection of landscapes and natural monuments as they cause irreversible damage and change the natural landscape.

In Focus: Tourism Development in Protected Areas

The parent company of the Blue Lagoon is also constructing a luxury hotel in a second protected area in the Icelandic Highland, Kerlingarfjöll. According to original plans for the area, the new hotel was to be one of the largest not just in the Highland, but in all of Iceland. The ambitious nature of the project raised concerns about environmental degradation and in 2015, the Icelandic Environment Association (Landvernd) appealed the construction, the first stage of which had begun without any environmental impact assessment.

Delay Issuing Permit for Hydropower Plant

A local council in South Iceland has postponed issuing a permit for the construction of a large hydropower plant on Þjórsá river to consider new information about the project’s potential environmental impacts, Vísir reports. The proposed Hvammsvirkjun hydropower plant would have an estimated capacity of around 95 MW and would create a lagoon with a surface area of 4 square kilometres [1.5 square miles].

Salmon fishermen and conservationists oppose power plant

The locality of Rangarþing ytra’s website states that a new message has been received from the Iceland’s North Atlantic Salmon Fund and the Fishing Association of Þjórsá river (Veiðifélag Þjórsár) calling on the local government to reject the National Power Company of Iceland’s request for a construction permit for the plant. “It was suggested that the matter be postponed until the next extraordinary meeting of the local council to give the locality’s environmental committee the opportunity to discuss the matter, given that new information regarding certain environmental aspects has been received,” the meeting minutes state.

One other local council is required to sign off on the hydropower plant’s construction permit, the council of Skeiðahreppur and Gnúpverjahreppur, and head of the local council Haraldur Þór Jónsson told reports the permit would be processed despite the delay in Rangarþing ytra. The National Power Company applied to the two localities for a construction permit for the plant last December after the project was approved by the National Energy Authority of Iceland.

Energy-intensive industries are largest consumers

The Hvammsvirkjun plant would have an estimated capacity of 95 MW. For comparison, Iceland’s largest hydropower plants are the Kárahnjúkar and Búrfell plants, with respective capacities of 690 KW and 270 KW. Both were built to provide power to aluminium smelters. Hellisheiði Power Station is Iceland’s largest geothermal power plant, with a capacity of 303 MW.

Snæbjörn Guðmundsson of nature conservation organisation Náttúrugrið has expressed concern that the proposed Hvammsvirkjun hydropower plant would be used towards Bitcoin mining, a growing industry in Iceland that is energy-intensive but contributes relatively little to the country’s GDP. The National Power Company has stated that it would not build power plants for the express purpose of providing energy to Bitcoin mining companies.

More than 4,000 Apartments Needed to Meet Housing Demand

apartments downtown Reykjavík housing

According to the latest report of the Confederation of Icelandic Industries, it is expected that in the next three years, there will be 4,360 fewer completed apartments entering the market than the estimated demand requires.

According to the forecast, a total of 2,800 completed apartments will enter the market this year. By comparison, approximately 3,800 completed apartments entered the market in 2020, followed by a decrease to around 3,200 in 2021, and then approximately 2,800 last year.

Read More: Difficult for First-Time Buyers to Enter Market

The recent report also predicts further contraction in 2025 and 2026. Looking further ahead, 2,800 apartments are expected in 2024, but in 2025 and 2026, the number will be no more than 2,000 per year given current trends.

However, given the current rate of population growth, it is estimated that there will be a need for 4,000 completed apartments this year and in the following two years. The accumulated deficit in supply and demand for new properties for the years 2023-2025 is projected to be 4,360 apartments.

Since the national agreement between the government and municipalities regarding the construction of 35,000 apartments over the next ten years was signed in July last year, the cost of average apartments has increased by approximately 7 million ISK [$50,000 USD, €46,000]. Interest rates have also driven housing prices up recently, and additionally, the cost of materials and labor for construction has increased by 2.6 million ISK [$18,000 USD, €17,000] during this period. An expected reduction in the tax incentives for construction will also increase the cost of apartment construction by an average of 1.2-1.5 million ISK in the coming years.

Read More: 35,000 Apartments to be Built in 10-Year Housing Plan

Given current trends, the report concludes that it is unlikely that the government’s target of constructing 35,000 new completed apartments within the period of 2023-2032 will be achieved unless the authorities take decisive action and intervene in the matter.

The recent report does, however, offer several recommendations. First and foremost, they suggest that the government should reconsider the proposed reduction of the tax refund for real estate developments.

The association also suggests that municipalities significantly increase the supply of plots and review the collection of fees before starting developments. “Last but not least, coordinated efforts by the government, municipal associations, the Central Bank, and labour market participants are needed to reduce inflation and inflation expectations, as this will create a foundation for lower interest rates,” the analysis states.

Kerlingarfjöll Construction Project One of Largest Ever in Highlands

Kerlingarfjöll

The tourist facilities at Kerlingarfjöll in Iceland’s Highland are receiving an overhaul these days to the tune of ISK 2-3 billion [$14-21 million, €13-20 million], RÚV reports. The development includes a luxury hotel and renovations to the campsite. It’s possibly the largest single investment in the Highland region that is not a power station.

Kerlingarfjöll is a mountain range in Iceland’s Highland and one of the most popular tourist destinations within the region. It was operated as a summer ski resort in the 20th century which was dismantled in 2000 due to decreased snowfall. The site is known for the spectacular colours of its rhyolite mountains and hot springs. Kerlingarfjöll was declared a protected area in 2020 by the Icelandic government.

Hotel smaller than planned

The hotel has been downscaled from its original plan, which called for 120 double rooms. In 2016, the Icelandic Environment Association appealed the construction of the hotel to the Environmental and Natural Resources Appeals Committee as the first phase of construction had begun without an environmental assessment having been completed.

The luxury hotel will have space for 50 guests and hostel-like facilities for 30 campers. Along with renovations to the neighbouring campsite, a new restaurant will be opened at the site. The hotel buildings facades will be in dark, earthy colours in order to blend in with the landscape and the construction aims to limit vehicular traffic around the site to improve guests’ experience.

Highland an important breeding ground for birds

The Highland of Iceland is an uninhabited area that covers most of the centre of the country. It is only accessible to humans during the summer, as deep snow and wide rivers make its dirt roads impassable most of the year. The Highland is an important nesting area for many species of birds, with the Þjórsárdalur valley being the single most important breeding ground for pink-footed geese globally.

British Army Off the Hook for Mining of Rauðhólar

Reykjavík City Airport flugvöllur

New information has come to light regarding the destruction of Rauðhólar, or the Red Hills, a natural area of craters by Elliðavatn lake in the capital area.

Originally, some 80 of these craters stood on the edge of Reykjavík, but their numbers have decreased due to gravel mining. Previously, it had been believed that the British military levelled much of this area for construction material during the Second World War, with some calling this one of Iceland’s first natural disasters of the modern era. However, recent evidence reported by Vísir shows that aerial photographs taken of the area taken shortly after the war prove that this is not the case.

Friðþór Eydal, an author interested in the activities of the British army during the war years, said in a statement to Vísir: “Mining had already begun here before the British started their construction of the Reykjavík airport.” The city of Reykjavík, according to Friðþór, had begun using the site for gravel in road construction before the British arrived.

Much material for the construction of the Reykjavík airport came from Öskjuhlíð, the hillside now home to Perlan, and also Fífuhvammur in Kópavogur. There was indeed gravel from Rauðhólar utilised in the construction of the Reykjavík airport, but the British also took careful records of the amounts removed.

According to Friðþór, the 95,000 cubic metres taken by the British army can’t account for the total damage done to the Rauðhólar area. Additionally, the new photographic evidence taken in 1946 still shows the area as largely in tact.

The largest part of Rauðhólar then must have been taken after the war, by the city of Reykjavík itself.

The area was mined for gravel up until 1961, when it was given protected status.

 

 

 

The Road to Borgarfjörður Eystri Now Paved

Borgarfjörður eystri east iceland

Residents of Borgarfjörður Eystri, a village in East Iceland, can now drive on paved roads all the way to Egilsstaðir.

The last section of paved road was completed earlier this month, a 15 km [9.3 mi] stretch near the town of Eiðar was finally paved.

Read more: Paving the Way to the Last Town in East Iceland

Héraðsverk, the contractor responsible for finishing the road project, reports that it was difficult going. The final section required significant blasting to clear the way. Now, however, a straight and wide road runs where there was previously a winding, gravel road with potholes.

The region has seen significant improvements in infrastructure in the last years, with a new road recently finished near Njarðvík. Residents also protested in 2018 by paving sections of road themselves to highlight inaction on behalf of the municipality.

Fragile Hope: How a programme to revive struggling villages in rural Iceland is rewiring collective mindset

 

With the recent improvements, all towns in the Fljótsdalshérað municipality are now connected via paved roads, a major milestone for this remote region of Iceland.

Eyþór Stefánsson, a resident of Borgarfjörður Eystri and representative in Múlaþing’s local council, is quoted as saying: “It’s amazing what’s happened in such a short time. We set off to fight to get sections of landslide-prone roads paved, but then this all started to happen incredibly fast.  We had hoped to improved the road from Eiðar but it turned out much better than we reckoned. They’ve taken away the blind rises, so now it’s a properly straight and wide road, practically a motorway.”

Vík Mayor Wants to Build Harbour for Sand Mine

Vík í Mýrdal

Iceland’s Minister of the Environment and Energy opposes plans to transport sand from a planned sand mine in South Iceland by truck along the Ring Road. Residents have expressed opposition to the plans, which would see large trucks driving at 7- to 8- minute intervals along the Ring Road in South Iceland 24 hours per day. The mayor of Vík, just 15 km west of the mine’s planned location, has proposed building a harbour in the town from which the sand could be exported.

Road transport “is not going to work” says Environment Minister

“Everyone knows that there is a lot of strain on infrastructure as it is, and putting heavy transport on top of that is something that I don’t think there will ever be agreement on,” Environment Minister Guðlaugur Þór Þórðarson stated. “Whichever way you look at it, adding to these roads and through these settlements is not going to work.”

Negative impact on traffic, positive on the climate

In 2020, German company EP Power Minerals purchased a large property in South Iceland, around 15 km [9.3 mi] east of the town of Vík í Mýrdal. The property mostly consists of sand plains and the company plans to establish a sand mine on it. The sand would be exported to Europe and possibly North America, where it will be used as an additive in cement.

A recently-published environmental report on the proposed mine judged the project’s impact on traffic and roads to be “considerably negative.” Its climate impact, however, was evaluated as “considerably positive,” as the material produced would replace cement clinker and reduce carbon emissions due to concrete production by 800 million kg of CO2 equivalents annually.

Only coastal town without a harbour

Einar Freyr Elínarson, Mayor of Mýrdalshreppur municipality (in which Vík is located), has proposed building a harbour in Vík from which the mined materials could be exported.

“Route 1 passes through several urban areas on the way to Þorlákshöfn [the planned export harbour]. So we in the municipality propose looking into the possibility of shipping all of this out from here on the coast, and building a harbour,” Einar told Vísir.

Vík is the only coastal town in Iceland that doesn’t have a harbour, but the south coast’s strong waves post challenges in such construction projects. The nearby Landeyjarhöfn harbour, from which the Westman Islands ferry departs, fills with sand that must be pumped out regularly.

Einar says he has proposed the idea to EP Power Minerals representatives who have not expressed direct opposition to the idea. The harbour would not be built using public funds, Einar says, calling it an “exciting opportunity” for the municipality, as well as the local tourism and fishing industries.