The construction of a power plant in geothermal area Þeistareykir in Northeast Iceland will begin in the coming days; Landsvirkjun, the national power company, and contractor LNS Saga signed an agreement on the plant’s construction on Monday.
“The energy is first and foremost intended to support employment development in Northeast Iceland and especially considering an industrial area at Bakki,” explained Landsvirkjun CEO Hörður Arnarson to RÚV. Bakki is located near the town Húsavík.
The plant, Þeistareykjavirkjun, has been under preparation for many years. It is assumed that it can launch operations in 2017. It will produce 45 MW in the first stage. “I find it likely that we can move on to 90 MW very soon, or as soon as the market condition allows for it, but further research is needed before we make a decision on that,” Hörður iterated.
Hörður stated that the area is sensitive and that the environmental impact will be monitored closely throughout the development process, which will be gentle. An EIA for a 200 MW geothermal plant has been approved and a 100 MW power plant has been authorized.
The agreement signed on Monday is worth ISK 6.6 billion (USD 48 million, EUR 45 million), while the total cost of the first stage could amount to 20-24 billion. It is assumed that up to 200 workers will take part in the construction.
The planned power plant in Þeistareykir has been protested in the past, particularly as it was originally supposed to power an aluminum smelter. Those plans have since been canceled. Operations at Bakki will include a silicon metal factory run by German company PCC.