Priority Dispatch Not Curtailed

Landsvirkjun has never curtailed priority power supply during its approximately 60 years as the National Energy Company, and there are no indications of that changing in the coming winter. We have always been careful not to promise more priority power supply than we know we can dispatch, even in bad water years. However, curtailments have had to be made in recent years, but only when stipulated in the power purchasing agreements, which have a lower tariff than priority power supply.

In simple terms, priority power supply is the electricity that energy generators are committed to dispatching to customers, regardless of the water budget, maintenance, or other foreseeable factors in operations.

It is evident that more energy generation in Iceland is necessary, a sentiment echoed by many. Landsvirkjun has been proactive in addressing this need, repeatedly raising the issue. Finally, we can begin the construction of the Hvammur Power Station and the wind farm Búrfellslundur. When energy generation is insufficient, curtailment may be necessary for customers with such stipulations in their power purchasing agreements. Meanwhile, it is not always possible to ensure energy for some companies, even when they could have used more energy than is available. Nevertheless, suggesting curtailment is imminent for priority power supply is irresponsible.

Does this mean that curtailment of priority power supply is impossible? No, we cannot make such a definitive statement, as in the event of a natural catastrophe, Landsvirkjun might be unable to generate energy. However, only unavoidable external occurrences (force majeure) could lead to curtailment of priority dispatch.

Landsvirkjun has always honoured all commitments to priority power supply. In bad water years, we ensure priority dispatch by curtailment where applicable. This is how our system is built, and it should not come as a surprise, as our customers are well aware of it. Here, I am only talking on behalf of Landsvirkjun, but I am confident other energy generators do the same. Landsvirkjun does not enter into an agreement if there is any doubt it can honour its commitments.

Furthermore, it is worth considering that Landsvirkjun has been tireless in ensuring household electricity security. For example, we have prioritised electricity sales to the general market above other electricity sales by supplying 45% more to the general market since 2021. There are limits on how much more Landsvirkjun can provide to the general market. The Company is not legally responsible for electricity security on the general market; the authorities bear the responsibility. However, we have certainly prioritised.

Additionally, we have lowered electricity sales to data centres by 50% year on year. We announced quite some time ago that electricity for cryptocurrency mining would only be dispatched in case of surplus energy and never as priority dispatch. Furthermore, a milestone was reached when we entered into an agreement for priority power supply with district-heating plants in the Westfjords, which means much less fossil fuel combustion in the future.

This article was first published on visir.is on 19 September 2024.