Demand for electricity in Iceland is greater than supply. Our green energy becomes ever more valuable, and its demand is expected to increase further. Supply is limited and building new power plants takes planning and time.
Under present conditions, Landsvirkjun must prioritise energy sales to certain groups of consumers for the coming years. This means that the Company will for the time being not focus on attracting new large-scale customers in the metal industry or other industrial commodities. Furthermore, at this stage the Company will not prioritise exporting energy.
Present high demand for green electricity can be divided into five categories:
- Firstly, domestic electricity consumption and the domestic energy transition has led to increased domestic demand, which Iceland´s energy company is committed to servicing.
- Secondly, it is important to support increased digital development in data centres (not cryptocurrency mining) and innovation, e.g. in food production and direct geothermal use such as aquaculture and other diverse green industries which require energy and elevate sustainable economic development throughout the country.
- Thirdly, Landsvirkjun supports the development of its current large-end customers. This has been done since the Company was established, however, new times offer new opportunities to strengthen their competitiveness and increase production of value-added products. Such development projects benefit the entire community and regularly call for increased energy use.
- Fourthly, there is demand from new large-end users in the metal industry and other industrial commodities, who want to set up operations in Iceland, but the Company will be unable to service at this time.
- Fifthly, the option of exporting energy in the form of e-fuel or by submarine cable. These markets will undoubtedly emerge sooner rather than later. However, they are not yet here. A submarine cable requires domestic debate and decisions before further development, as well as strong political leadership, just as has been the case in Norway.
The first three categories must be given priority; however, the other two do offer interesting options for the future.
Hörður Arnarson CEO, Landsvirkjun