The station is located on the Tungnaá River and takes advantage of the drop between the tail water of the Hrauneyjafoss Power Station and the Sultartangi Reservoir. The head will is 40 metres, with a harnessed discharge of 280 m3/s and an installed capacity of 95 MW. The energy generating capacity of the Station is estimated at 585 GW/h annually.
The main proposal for the Búðarháls Power Station is to build two dams to the east of Búðarháls, a short distance above its junction with the Tungnaá River and the Kaldakvísl River. One of the dams will be built across the Kaldakvísl River and the other across the outflow from the Hrauneyjafoss Power Station. The dams will both be approximately 25 metres at their highest point but will vary in length; one of the dams will be 1100 metres in length and the other 170 metres.
The dams will form the intake reservoir for Búðarháls and will be given the name ‘Sporðalda Reservoir’, with an estimated surface area of some 7 km2. The reservoir will mainly fill the channel of Kaldakvísl and also extend slightly into Þóristungur. A headrace tunnel approximately 4 km long will be excavated from the intake structure at the Sporðalda Reservoir, westward under Búðarháls, to a surge basin by the Sultartangi Reservoir. Two 60 metre long, steel pressure pipes will transport the water from the intake to the station’s turbines. The powerhouse will be mostly above ground, built into the western side of the slope of Búðarháls.
There will be two 47.5 MW Kaplan generating units.
Energy from Búðarháls Power Station will be sent from the generator step up transformers, located in front of the station and then underground to the Landsnet substation, located to the south of the powerhouse. It will be transported from the substation, via high voltage line, eastward across Búðarháls to the Hrauneyjar line and onto the National grid.
There are six hydropower stations in the catchment area of Rivers Thjórsá and Tungnaá: Búrfell, Sultartangi, Hrauneyjafoss, Vatnsfell, Sigalda and Búdarháls, with combined energy of 935 MW. Water for all the power stations is provided by three main reservoirs, Thórisvatn, Hágöngulón and Kvíslarveita, along with smaller reservoirs connected with each station.
Lake Thórisvatn, Iceland’s largest lake, is the largest reservoir and an important part of Landsvirkjun’s utility system. All water accumulated in Kvíslarveita and Hágöngulón reservoirs runs through Lake Thórisvatn.
Lake Thórisvatn became a reservoir with the harnessing of River Thjórsá at Búrfell Mountain in 1970-1972. River Kaldakvísl was diverted into the lake at the northern edge of the lake and a controlled outflow constructed at the southern edge.
A canal was dug from the lake and a concrete gate structure built in the canal to manage the flow rate. The canal is named the Vatnsfell Canal, and carries water from Lake Thórisvatn through the Vatnsfell Station into the Krókslón Reservoir above the Sigalda Station, and from there to other stations further down in the catchment area.
Work on the Kvíslaveita Reservoir began in 1980 and was completed in 1997. Kvíslaveita is the collective name for the dams, canals, bottom outlets and gate structures that manage the flow rate from the River Thjórsá and its tributaries into Lake Thórisvatn.
The Háganga Reservoir was constructed in 1997–1999 and covers an area of 27 km2. Its purpose is to increase the efficiency of the catchment area of River Kaldakvísl. During the summer months, water accumulates in the Hágöngulón Reservoir, with very little water flowing down the Kaldakvísl riverbed.