Electricity sector in Iceland

The majority of the electricity is sold to industrial users, mainly aluminium smelters and producers of ferroalloy.

Electricity production increased significantly between 2005 and 2008 with the completion of Iceland's largest hydroelectric dam, Kárahnjúkar Hydropower Plant (690MW).

[3] Iceland's national electrical grid is owned and run by Landsnet and is composed of 3,000 km of transmission lines and 70 or so substations.

Two remote islands disconnected from the Icelandic grid rely on diesel generators, Grímsey and Flatey.The Icelandic Transmission System Operator (TSO) is Landsnet, a company jointly owned by three state-owned power companies: RARIK, Landsvirkjun and Orkubú Vestfjarða.

There are plans to connect the Icelandic grid with the UK using a subsea High-Voltage DC (HVDC) interconnector, with a potential capacity of up to 1.2GW, called Icelink.

This would allow Iceland to export excess energy to UK and in turn linking it to a wider European super grid.

[9] In the 2019 UK General Election 2019, the Democratic Unionist Party included in their manifesto a version of Icelink in which Iceland would instead be connected to Northern Ireland.

On 27th of April 2023 the Association of Issuing Bodies (AIB) suspended the export of Guarantees of Origin (GO) from Iceland due to the suspect of possible double counting.

Contracts for large scale energy users were in general long term, up to 30 years with options for extension.