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Landsvirkjun and PCC Bakki Silicon hf. sign a new power purchase agreement

April 1, 2015
Shared headquarters of Landsvirkjun and Landsvirkjun Power in Reykjavik, Iceland

Landsvirkjun and PCC Bakki Silicon hf. signed a new power purchase agreement (PPA) on the 27th of March of this year. Landsvirkjun will provide electricity to power a metallurgical grade silicon metal production plant being built by PCC Bakki Silicon hf. in Bakki near Husavik. The facility is scheduled to commence operations in early 2017 and will produce up to 36,000 tonnes, during the first phase of operations, using 58 megawatts (MW) of power.

The contents of the new contract are similar to those outlined in the previous power purchase agreement in 2014 with the exception of a few provisions. The EFTA Surveillance Authority (ESA) decided to assess the power contract and the transmission agreement between the two parties in December, 2014. The previous contract was terminated by both parties as various conditions of the contract were unfulfilled and the time provisions were no longer realistic. The contract from 2014 is therefore no longer valid. The ESA has been notified of the new power purchase agreement.

“We remain very satisfied with our partnership with PCC Bakki Silicon hf. and with our cooperation with the ESA, during the development of the new contract. We are confident that silicon metal production will thrive in Iceland for the long term, where power is generated from 100% renewable energy sources”, commented Dr. Hordur Arnarson, CEO of Landsvirkjun.

“Our cooperation with Landsvirkjun has been trustworthy and with the new power contract we reach an important milestone. We believe first-rate conditions exist to build and operate our silicon metal plant at Bakki in Iceland,” commented Peter Wenzel, Board Member of PCC BakkiSilicon, who leads the project on behalf of the company.

The contract is subject to certain conditions which must be fulfilled by the middle of the summer, including the completion of contracts with other parties and the full approval of the contents of the contract by ESA.

About PCC BakkiSilicon hf:

PCC SE is a privately owned industrial holding and participation company based in Duisburg, Germany. The group operates in 16 countries with a total workforce of around 2,800 employees. The three main divisions – Chemicals, Logistics and Energy - generated a sales turnover of 625 million EUR for the fiscal year 2013. More about PCC SE on the internet

About Landsvirkjun

Landsvirkjun is the National Power Company of Iceland, was established in 1965 and is a state owned company. Landsvirkjun’s role is to maximise the potential yield and value of the natural resources it has been entrusted with, in a sustainable, responsible and efficient manner. The Company produces electricity from renewable resources such as hydropower, wind power and geothermal energy producing 75% of all electricity in Iceland. The Company is also a leader in sustainable energy generation and supports increased expertise, innovation and technological development.


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