Landsvirkjun exploring investments abroad

Although Landsvirkjun primarily focuses on energy production here in Iceland, the company has for years provided consulting services abroad and participated in the development of energy production. The focus has been on the Arctic, and work is now underway on a wind farm in Newfoundland, and a major hydropower option in Greenland is being explored in collaboration with two large energy companies. The possibility of participating in a hydropower plant in Scotland is also being investigated, in partnership with energy production companies in the other Nordic countries.

Kristján Guðmundsson, Director of International Projects, appeared on Grænvarpið, the Landsvirkjun podcast and talked about Landsvirkjun's projects abroad. He points out that Landsvirkjun was, among other things, founded to cultivate domestic knowledge on the construction and operation of power infrastructure. This knowledge, in the field of hydropower plants and geothermal energy utilization, has long been sought after outside of Iceland.

The subsidiary Landsvirkjun Power was founded in 2007 to work on investments abroad. Although the focus will always be on domestic operations, it was considered sensible to use this knowledge and experience to provide additional support for the operations of the national energy company. The first investment of this kind was in a small hydropower plant in Georgia, in which Landsvirkjun holds a 20% stake.

Landsvirkjun's policy on international projects sets the goal that by 2035, the company will own 100 MW abroad, which is equivalent to one Hvammsvirkjun power station. These 100 MW could be spread across 2-3 power plants, which would need to be operated in partnership with others. The aim is for this figure to reach 350 MW by 2045, which is equivalent to just under Búrfell Station I and II combined.

Kristján points out that investments in energy production can quickly run into tens of billions of krónur. Landsvirkjun is proceeding cautiously, as large investments abroad have to be weighed against domestic investments and dividend payments. A balance needs to be sought in this regard.

Landsvirkjun is currently exploring various investment opportunities abroad. Kristján mentions three possibilities, but emphasizes that they are not yet finalized. The first is a wind farm in Newfoundland. The initiative came from one of North America's largest wind power companies, which has now decided to sell the project, and Landsvirkjun has been in negotiations to purchase it in recent months.

The second project is a massive hydropower opportunity comparable to the Kárahnjúkar Power Plant, Iceland's largest power station, called Tasersiaq, in southwest Greenland. There, Landsvirkjun is collaborating with international partners who rely on the company's experience in energy production in the Arctic and its connections with Greenland. The interesting aspect of this project is that the company that undertakes its further development must also bring the energy buyer with it, for example, a data center or an aluminum smelter. Two very large foreign energy companies are involved in this project, in addition to Landsvirkjun, which would own about 10-20% if everything goes according to plan. A 700 MW power plant is currently being considered, which could potentially be expanded to 1000 MW.

The third project, which is outside the actual Arctic region, is a hydropower plant in Scotland. A collaborative project with energy companies from the other Nordic countries is being explored there.

Kristján says he sees very clearly in his work how good Landsvirkjun's reputation is, as there is widespread interest in collaboration. Landsvirkjun holds fast to its values wherever it operates, whether in environmental or safety matters or in its relations with the local community.