Westfjords Power Company ltd. will see generating capacity at its biggest hydro plant increase by a third when current work is completed and it foresees larger increases to come…and all financed from its own piggy bank.
At a time when Icelandic energy companies are regularly in the headlines about precarious finances and difficulty paying and/or securing loans, it is worthy of note when one small power company is able to invest in large works using only its own money.
The Westfjords region of Iceland has relatively little natural hot water, and none hot enough to run geothermal power stations. Westfjords Power’s biggest hydroelectric station is called Mjolkarvirkjun and combined with other smaller plants, the company is able to generate 60 percent of the region’s power needs. That means that a massive 40 percent of the region’s power is currently brought in from elsewhere in Iceland.
Mjolkarvirkjun is split into two separate generating units and a third is currently under construction. The second of the two existing units will also be enlarged next year. The project is expected to cost ISK one billion (USD 8.5 million) and the power company does not plan to finance any of it with loans.
Steinar Jonasson, station chief at Mjolkarvirkjun, told Visir.is that Westfjords Power is a tightly run ship which does not invest money it does not have. The result, he said, is that Westfjords residents have the lowest electricity costs in Iceland.
The lack of natural hot water means district heating systems in the Westfjords use electricity to heat water, which means that the ‘lowest electricity costs’ to consumers actually translate into relatively high overall energy bills. However, the company’s attitude towards debt is winning it praise all over Iceland right now.
The new generator is expected to open in November and will increase the plant’s capacity from 8 MW up to 11 MW. The Westfjords’ unacceptably regular winter power cuts are minimised the more electricity is generated locally, Jonasson added.