Landsvirkjun´s Renewable Energy Potential and its Impact on Iceland´s Economy

12.9.2011 Starfsemi Útgáfa

English version of an analysis of the outlook for Landsvirkjun to the year 2035 has now been published.

In April 2011, Landsvirkjun [LV] asked GAM Management hf. [GAMMA] to prepare an analysis of the outlook for LV from 2025 to 2035, in the wake of LV's proposed investment plan. The analysis includes an assessment of LV's financial position and its ability to pay dividends and also the potential impact of the dividend payments on the Icelandic economy. The effects of investment activity on the Icelandic economy in the next 10 to 15 years are also estimated.

This is the english version of the Icelandic report, which was published June 28th 2011. All numbers, data, calculations and conclusions are from that date.

Effects derived from the investment policy can in fact be split into three elements:

  • effects from investments during the investment period,
  • effects from the operation of energy plants and new industrial activity and
  • wealth effect derived from the improved financial situation of LV, i.e. dividend payments and tax paid to the Icelandic state.

This report was written by specialists working at GAMMA, following a request from Landsvirkjun. LV's own assumptions on the development of domestic average energy prices, the investment needed and energy sales are used, although GAMMA is responsible for the calculations and final conclusions.

The report was done by:
Valdimar Armann, economist and financial engineering.
Gisli Hauksson, economist.
Dr. Asgeir Jonsson, economist.
Lydur Thor Thorgeirsson, MBA, B.Sc electrical & computer engineering.

The report can be found here. 

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