News

HS Orka signs 2-year US$20m PPA with silica producer

Svartsengi geothermal power plant of HS Orka, Iceland (source: Enex)
Alexander Richter 17 Feb 2011

Icelandic geothermal power company HS Orka, majority owned by Magma Energy, signs 2-year power purchase agreement with silica factory in Iceland for a contract value of US$20 million.

As reported by Icelandic media today, HS Orka – majority owned by Magma Energy – announces it has signed a 30 MW power agreement to sell electricity to a silica plant of Iceland Silica Corporation ehf. in Helguvík for the period of May 2013 to the end of 2015.

The contract value for the company is ISK2.5 billion or US$20 million.

Iceland Silica is developing a new silica metal production plant at Helguvik, Iceland, about 20 km from HS Orka’s power plants. HS Orka’s 30 megawatts of supply will come from electricity currently being supplied to an Icelandic aluminum smelter under a soon expiring power contract that ties the electricity price to the world aluminum price. The new contract with ISC has no linkage to the aluminum price and will be at a higher base price than the contract it is replacing. HS Orka’s supply of power to ISC’s new plant will also provide a broader industrial base for Iceland and improve the employment and economic development situation in the vicinity of HS Orka’s geothermal power operations.

Julius Jonsson, CEO of HS Orka, mentions the importance of this first step in building the plant at Helguvík. “There is great  satisfaction that HS can help this project to develop. The construction of the silica plant is extremely important to the region and the entire country and is hopefully just the first step of many to the necessary development. HS Orka is interested in participating in the ongoing development of additional power generation and expects to get to the required licenses, “said Julius Jónsson.

Source: Visir.is (in Icelandic), Magma Energy release by e-mail