Landsvirkjun signed Letters of Intent with regard to the main components of energy contracts with several other companies in 2013. Landsvirkjun is currently involved in serious discussions with a number of other companies.
The uncertain global economic environment has delayed the decision making process in businesses worldwide and has slowed down the development of numerous projects. However, many businesses are preparing to proceed with projects once the economic environment improves. The outlook for 2014 is unclear but Landsvirkjun is confident that the demand for energy will exceed supply, once the international economy recovers.
This year, work continued on marketing Iceland as an advantageous location for diverse power intensive industries. Landsvirkjun’s customer base has increased in the last few years and new customers within new industries have chosen to begin operations in Iceland, as a result of long-term energy contracts and the security of supply.
The World Economic Forum has assessed the security of supply in Iceland as one of the most reliable in the world. Of the 148 countries assessed, Iceland achieved the 3rd- 9th position.
Source: The Global Competitiveness Report 2013-2014.
The marketing drive this year included advertising via the web and printed materials, participation in various conferences, meetings, a new website and more. Marketing measures also included the production and distribution of promotional videos, shown at various locations worldwide.
International data centers are a prime example of a new industry in Iceland and Landsvirkjun believes that Iceland is a particularly suitable location for this type of business. Competitive energy contracts, a continuously cold climate, a strategic location between Europe and the USA are just some of the advantages offered by Iceland. Two international data centers are already in operation in Iceland and Landsvirkjun’s marketing efforts focused on expanding the customer base in this sector.
Guarantees of origin and green certificates
Ensuring access to markets for Icelandic guarantees of origin remained a key focus in 2013. Trading began with the Netherlands this year and Germany approved Icelandic guarantees of origin in the autumn. Work continued on building Landsvirkjun’s contact network in the sector. Subsequently a Company representative was accepted both into RECS International and the World Resource Institute, a non-profit and leading organisation in the field of worldwide renewable energy. The market prices for guarantees of origin have fallen consistently throughout the year despite increased demand, in part, because supply has increased due to an increasing number of companies offering guarantees within the market. The Marketing and Business Development Division will concentrate its efforts in the near future on strengthening Landsvirkjun’s position within the international guarantees of origin market. The green certificate market is relatively new and limited to Europe. The market is still developing but preliminary assessments imply that the sale of green certificates could increase Landsvirkjun’s profits considerably in the coming years.