Landsvirkjun’s new plan was presented at the company’s annual general meeting, which took place on April 15th. According to the company’s director, Hörður Árnason, the planned power plants are to be built in several rivers, including Þjórsá, Tungnaá and Hólmsá, as well as geothermal areas in the north of Iceland. The construction of Búðarháls Dam in Tungnaá has already started and Landsvirkjun plans to start energy production there in 2013, whereas all the other options are still being looked at in the making of a framework programme concerning the use and protection of Iceland natural resources.
These plans are presented as a way to increase Landsvirkjun’s profitability as the the company is heavily indebted after the Kárahnjúkar disaster, especially in comparison with other European energy companies. This means that even more loans are needed for the construction of the new power plants, which later will have to be paid up by the same method. In other words: A vicious circle.
Saving Iceland and other environmentalists have repeatedly warned against large-scale energy projects as a counterweight to the current economic crisis, e.g. in an article in Icelandic newspaper Morgunblaðið in October 2008 where Jaap Krater, ecological economist and one of Saving Iceland’s spokespersons said:
How did the [Alcoa] Fjardaal smelter contribute to Iceland’s economic crisis? The two billion dollars for the construction of the country’s largest dam [Kárahnjúkar] had to be borrowed by the state. That led to a more than significant increase in the current account deficit, which is now felt in increased inflation and depreciation of the currency. The economic cost now needs to be coughed up.
And he then continued:
Note that any schemes that demand new power plants associated with a significant amount of borrowed capital will have this effect, whether an expensive dam or power plant is meant for aluminium, a silicon refinery, data centre or some other purpose.
During a recent presentation of Landsvirkjun’s plans, held in the University of Iceland, the company’s representatives highlighted their interest in three possible energy purchasers; data centers, the European energy market (through a marine cable) and above all the aluminium industry. Like repeatedly reported by Saving Iceland all proposed aluminium projects in Iceland are on hold at the moment, because of either financial or energy-related uncertainties but due to massive mismatch in media coverage it is hard to get a clear picture of the situation.
At the same time as Landsvirkjun proudly presents its plans for a “new Kárahnjúkar dam”, the company, along with the minister of industry, states that the Icelandic nation has to settle up on a joint energy policy. There was never a joint reconciliation upon the Kárahnjúkar Dam, in fact it split the Icelandic nation in two conflicting arrays, which reveals Landsvirkjun’s democratic jargon as nothing but clear Orwellian Newspeak. It is known to both the company and Iceland’s authorities that Icelanders will never reach an agreement about such large-scale energy production, especially when it is aimed to be sold to aluminium companies.