Law on electrical power
The Electricity Act, No. 65, dated 27 March 2003, was passed by the Althing on 15 March 2003. Among other things, the Act states, “The purpose of this legislative Act is to promote an economical electricity system and thereby strengthen Icelandic industry and regional development. To this end:
1. Conditions shall be created for competing in electricity production and trade, with such restrictions as prove necessary for secure electrical supplies and other public interests.”
This legislation is bringing changes to the market, and electricity producers are having to adjust to the new environment. Energy production and transmission will be separated. Landsvirkjun has negotiated with most of the suppliers on the basis ob bilateral contracts that range from one hour and up to 12 years. The current contracts with firms in heavy industry will remain unchanged.