Reykjavik Energy spins out geothermal plants and power sales
Iceland utility Reykjavik Energy (Orkuveita) spins out its power plants and electricity sales into new company called Orku Náttúrunnar (Power of Nature) to comply with new legislation. The company is one of the largest geothermal power plant operators in the world.
As announced just before New Years, Reykjavik Energy (Orkuveita Reykjavikur), the local utility owned by the municipality of Reykjavik and one of the largest geothermal power plant operators in the world, has spin out its power plants and power sales.
Orka Náttúrunnar (ON) will take over the operations of the power plants of Reykjavik Energy and all power sales.
The company, translated into English it means Power of Nature, will be a public company owned by Reykjavik Energy and is set up to comply with the separation of core competitive activities. The customers of ON are about 75,000, including households and large aluminium smelters.
The provision of services related to water supply, hot water supply, sewage and the distribution of electricity will remain with and operate under Reykjavik Energy.
On December 19, 2013, a new law passed the Icelandic parliament that reflects the changing emphasis of the owners of the company, the board of directors and management, emphasizing the role of traditional utilities.
The company will be the second largest electricity producer in Iceland after the National Power Company (Landsvirkjun) and the company with the largest number of customers for its electricity.
ON operates the geothermal power plants at Hellisheidi and Nesjavellir, as well as two hydro-electric dams.
Preparation of spin out has been a complex and exciting project for Reykjavik Energy,” says Bjarni Bjarnason , CEO of RE, in a press release . ” The requested operational spin out has been controversial . Now it has happened, and it is important that the objective of increased competition will benefit the public.
Reykjavik Energy has managed to turn its operations around, not least its financial position. With a clear strategy, developed in cooperation with the owners, the Board of Directors , management and employees , we can now approach our daily work more comfortably, particularly in the guidance that the spin-out now provides.
The Group is therefore well positioned in the separation of its competitive parts of the business. The separation also provides opportunities for us and our employees – especially the staff of Power of Nature (ON) – on behalf of and for the benefits of our clients. ”