The hydropower plant and dam at Kárahnjúkar, the eastern highlands, is not profitable enough for its owner, the Icelandic state, according to CEO of Landsvirkjun, the national power company, Hörður Arnarson.
The Kárahnjúkar dam under construction. Photo by Páll Stefánsson.
The Kárahnjúkar plant, which amounts to 65 percent of the total value of Landsvirkjun’s power plants, which is USD 3.2 billion (ISK 377 billion, EUR 2.4 billion), Fréttablaðið reports.
However, the revenue from the Kárahnjúkar plant only amounts to 32 percent of the company’s total revenue, while other power plants deliver 68 percent of the overall revenue. This is after the value of older assets has been updated.
The earnings of the Kárahnjúkar plant compared to the recorded value amount to six percent. Hörður said they should preferably be ten percent of the plant’s recorded value; an absolute minimum is eight to nine percent.
The Kárahnjúkar dam and hydropower plant were constructed primarily to power the Alcoa-Fjardaál aluminum smelter in Reyðarfjörður, which opened in 2007. These two projects were controversial, particularly among environmentalists.
Click here to read other stories related to Kárahnjúkar.