Tomorrow, a decision will be made as to whether the Suðurnes Power Company [HS orka, in Icelandic] will become fully privatized and owned by a Canadian company called Magma Energy.
This is the horror story of the week.
I have to confess that I have had some trouble understanding this matter and hence not given it my full attention. Today, however, I read a number of articles about this planned privatization and must say that I am profoundly shaken by the whole affair – even if I still don’t fully understand everything that has propelled the issue to its current state.
The story goes something like this. Back in 2007, the Ministry of Finance decided to sell its 15.2% share in HS orka [which supplies geothermal energy and heat to the people of Suðurnes, the peninsula on which the Keflavík International Airport sits - and also the Blue Lagoon]. Apparently it was specifically stated that the two largest power companies in Iceland – The National Power Company [Landsvirkjun] and Reykjavík Energy – were not eligible to bid for the share due to competition regulations.
The highest bidder turned out to be a company called Geysir Green Energy. There was a lot of controversy surrounding that company, all sorts of corruption allegations, so much that it managed to bring down the Reykjavík City Council back in October 2007. Part of the controversy centered on the fact that, for the first time, a public utility company in Iceland was being privatized – at least in part. The deal was signed on behalf of the Icelandic State by then-Finance Minister Árni Mathiesen of the Independence Party [remember him?].
Last July, the town of Reykjanesbær [a stronghold of the Independence Party, which favours privatizing everything to sell to their favoured friends] sold its share in HS orka to Geysir Green Energy. At the beginning of July, the towns of Grindavík and Hafnarfjörður decided to use their option to buy a preemptive share in HS orka and sell it to Reykjavík Energy, for the purpose of ensuring that the company remained in the public sector. The Competition Authority, however, ruled that Reykjavík Energy was not permitted to own more than a 10 percent share in the company – so Reykjavík Energy pulled out.
Long story short – the Canadian company Magma Energy has now made a bid to become a core investor in HS orka with a 32 percent share. The offer expires at noon tomorrow, and unless something radical happens, it is a very real possibility that the first public utility company in Iceland – which provides the public and- yes – industry with clean, green, cheap geothermal energy – will become fully privatized, and under the control of a foreign investor.
The real scary bit, though, is that through this purchase, Magma Energy gains an exclusive right to utilize Iceland’s geothermal energy fields in the area for the next 65 years, with the option to extend for another 65 years after that. In other words, if the powers that be sign on that dotted line tomorrow, the first instance of Iceland’s natural resource passing into foreign hands will become a reality – for the next 130 years.
To add insult to injury, the price for leasing the energy fields will amount to a piddly ISK 30 million per year, which – as they so succinctly put it over at Smugan – “That amount is ten times lower than was considered justifiable to pay one útrásarvíkingur* to take on a management position in a bank.” Or roughly equivalent to renting an office space in downtown Reykjavík for a year.
130 years, people!
And once that natural resource is in private hands, it can be exploited in any way the new owner sees fit. One thing is sure: the private company will almost certainly concern itself first and foremost with the bottom line. It will likely jack up the prices to the private consumer, and it will siphen off all profits which previously went towards regional development. Consequently the region will suffer and living standards will most probably decrease substantially. The new owner will have the Reykjanes peninsula in its grip.
It’s just as frightening to think that in these times of economic weakness and while the nation is looking the other way [Icesave, EU, etc.] the opportunity is being seized to sell off our precious resources at bargain prices. God help us.
IT IS DARK NOW, LIKE THIS POST
Seriously, for the first time I am really starting to fear for this country’s future. Like, really SERIOUSLY. It’s been a cool and somewhat blustery day, showers eased up this morning and the sun made an extended appearance this afternoon. Currently it’s 11°C [54F]. Sunrise at 5.30 am, sunset at 9.30 pm.
*útrásarvíkingur - the term used here in Iceland to describe the “modern-day Viking marauders” who managed to drive this country into the ground.
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Alda, I think you are being a bit too pessimistic here, 32% part is not full privatisation and if we do not like their prices we can choose from where we buy the electricity. I hear Rafveita Reyðarfjarðar is pretty competitive these days.
It took nearly 700 years to gain independence from foreign control and less than 70 to lose it again? And of course the crime is compounded by selling that which is dear cheaply.
WHAT??? are you starting to fear just now?? wow!! And this is just the very begining, I give it 2 years and even the water we drink from the tap will be privatized, health care and education is next, off course they dont say its beeing privatized, they say “forign investors” because nothing makes an Icelander happier now than to think somebody is willing to “invest” in Iceland (helps our ego). Same thing with Eimskip, gone. At least thats not a natural resourse. By the way there is no other way to keep things running here in Iceland… unless they reject all debt, declare bankupcy and start from cero, but you think our “new” goberment which is the same than the old will do that? they are trying to sell in the media (gov.) “Canada ready to invest in Iceland”. Everything that is worth something will have to go, not before they ensure a good bone for themselves and fillup their pokets with money(euros and pounds off course), it´s sad but the sooner we understand it the happier we will be.
This is truly tragic; this is the beginning of the end.
Wake up Islanders and take to the streets – discover your revolutionary hearts before it’s too late (which, I fear, it may already be). Before you know it your whole country will be privatized and there will be no turning back.
I live in a country where national resources have long been privatized, as has the military, higher education, our health care system, the prison system…you name it. As a consequence the energy industry regulates omissions, the pharmaceutical companies and health insurance companies write the medical recommendations for the NIH (Nat’l Institutes of Health), the industrial food complex governs our food safety and labeling… I know this is not a blog about the terrifying consequences of privatization in the U.S.but please take this to heart. Once all is privatized the government will serve only to benefit the corporate interests and all will be lost.
(I write this with tears in my eyes and a sense of overwhelming rage- I love all that is Iceland).
Útrásarvíkingur sums it up quite well. It is dark, and things such as this portend great trouble for Iceland if they are not stopped cold.
This from a USA perspective where such transfers of public resources to private profit are de rigueur. The result is invariably the same, prices go up and the environment suffers. Around here there is a mortal dread of anything termed socialistic, even if some aspects are, without the understanding that collectively protecting the the public good makes for good governance and society.
That the details of this are only coming to light now perhaps not surprising, as those that foment such things prefer the shadows. The citizens of Suðurnes may have a better sense of this when they begin to pay for it. Such companies have but one objective: money, and as much of it as possible. Such a company will probably also soon realize that its geothermal resources are being underutilized and it needs to expand them greatly. Considerations of Iceland and her people will not be part of the equation.
You are right to be very worried.
Your pain is real and all I can offer is hope from far away; surely the wasniceland powers will see the folly of this?
dave
You know, this looks like a really bad idea, both in principal and in detail?
In a world with increasing global warming, carbon-free energy generation becomes progressively more valuable and will probably continue to do so for the whole of those 130 years. Iceland’s geothermal plants not only represent existing installed carbon free generating capacity but they also represent world-leading expertise in the harnessing of geothermal power; that expertise, too, can only grow more precious. Setting a price now for such a long period seems… inadvisable. Setting so low a price!
But beyond that, Iceland depends for a large proportion of basic nutrition on imports. If you can’t balance those with exports, things look a bit grim. A key export is embodied energy – in Iceland’s case, largely in the form of smelted aluminium; and, in the aftermath of the Sayano-Shushenskaya accident last week Iceland’s ‘carbon-free’ (one can hardly call them ‘green’) aluminium smelters have to look even more valuable on a global scale.
Now, OK, Alcoa already owns (most? all?) of the smelters, but the smelters and the generating capacity are symbiotic. And the capability to produce significant quantities of ‘carbon free’ aluminium ought to be seen by Iceland as a key strategic asset which should not be in foreign hands.
So not only is the price wrong, this is something you can’t afford to sell anyway.
Everything you fear will come to pass. Thatch privatised the power sector in the UK and is now firmly in the hands of the French,Germans and Americans. Prices have gone up massively and they think nothing of cutting off the supply to those who can’t pay, even in the depths of winter. Beware!
Hmmm … this raises an interesting issue. In the recent issue of Economist magazine there was an article on how Britain faces a very serious energy crisis by the year 2015. Its coal plants are obsolete and its nuclear plants are shutting down, leaving it facing brown-outs unless it can find a long-term supply, such as natural gas or – something else.
God forbid I should suggest that the British would ever covet the resources of another country. After all this is the country that gave cricket to India, scones to Canada, and A-levels to Nigeria, and asked for nothing in return, except a few rocks and trees and odd bits of plants that no one was going to use anyways. But if the English are facing Bhagdad-syle blackouts in a few years, with no tube or telly and shorter pub hours… well, it makes one think, doesn’t it?
Oh you say, that’s not even possible is it? How can you can get all that electricity to Ipswich or Newscastle? They don’t make batteries that large!
Hmmm. There’s already underwater electricity cables between Italy and Greece, and here in Norway construction has begun on a 360 mile underwater cable connecting Feda in Vest-Agder to a town in the Netherlands that has too many vowels for its own good.
The British claim that Iceland owes them money, and lots of it, and poor Iceland has nothing to pay with except cold water running downhill and hot water bubbling out of the ground. It does make one think, doesn’t it?
Thanks for the excellent comments, everyone. It’s particularly interesting – and relevant – to read the comments of those of you who have lived with this sort of status quo.
Sigvaldi – 32% is the share Magma will own. If I’ve understood this correctly, Geysir Green owns the rest.
The domestic market is negligible. I wouldn’t worry about electricity bills going up locally although I would be a bit worried about losing control over those fields for 130 years given everyone else is running out of oil. The Canadian company is taking a punt that it can somehow export Iceland’s vast free geothermal energy supplies and pipe it overseas. It would involve crazy infrastructure investment so I can understand why they want such a long lease. Is there any information on any sort of profit sharing during those 65 years? Or is it until they recoup their costs? Does Iceland have a get out clause if Magma don’t begin work by year 30 (for example).
Now may also not be a bad time to check the terms of any oil drilling contracts too.
One word: AlCan.
@Flygill
I do hope that irony was conscious.
However, long distance transmission of electrical energy is hugely inefficient, so Iceland need not fear that. What Iceland should be wary of is the fact that the energy can be embodied in other forms – for example, it could be used to electrolyse seawater into hydrogen, which could then be exported as fuel to richer countries like China and India. No, I’m serious, we’re looking at a 130 year time frame here.
If the electricity generation is owned by foreign interests, and those interests can make more money out of selling hydrogen to India or aluminium to China than they can selling electricity to Icelanders, the lights will be going out all over Suðurnes.
As a Canadian living in Iceland, this is very concerning.
One reason we moved to Iceland was because of the energy and heat.
When we lived in Alberta, Canada, another place that loves to privatize everything, the heating bill was insane, often costing more then our mortgage in the winter. In the winter, and it is cold there, many people simply can not afford to keep the house at a decent temperature, causing a lot of problems.
That is what happens when a private company is looking to make a profit on a necessity. Any money they make now on the sale will be spent on government subsidies for people who can not afford to pay the heating bill.
This happens in Canada too…
Another related and disturbing scenario was mentioned briefly in the papers a few weeks ago as an aside. it was that HS/Magma was interested in taking over development of Landsvirkjun´s geothermal properties in the north, up by Husavik.
Makes perfect sense; LV is crippled by debt and focused primarily on hydropower, why not unload opportunities it doesn´t have the capital to exploit anyways for much needed cash. And Magma can carry out its aggressive expansion strategy with Canadian (or whoever´s) capital.
If there ever was a time to strike, and fast, to take control of Iceland´s natural resources, this is it. It´s never been cheaper to buy assets or influence.
People say now “if we´d only known” about the shady dealings of the banks and the future of the country re: finances.
They better take a look NOW at the future of the country re: resources. NOW. Or this country will just be a place where icelanders are allowed to work with fewer permits.
Hear, hear!
According to their website, Magma Energy is stating to have acquired another 10.78% share in HS Orka with an additional option for 5%. So, if both transactions were concluded, they would hold a share of about 48%.
It would be very interesting to know about the clauses in the contracts of those transactions – and about possible relations of the advisor for Magma Energy on the transaction (‘Glacier Partners’), as stated on their website, to it’s Icelandic counterparties.
From our experience in Germany, the privatisation of utility companies, particularly energy companies, has lead to higher prices and worse service. And as the making of profits is primary objective, cost factors like the maintenance of infrastructure such as power lines, is generally being neglected.
I think, this is not really the first case that public resources are being sold off to foreigners at a bargain price. Other examples include energy for aluminium smelting. Not to mention public resources like fishing quotas, which have been plundered by select few Icelanders. There seems to be a pattern.
Magma will own 32%, but Green Geysir Energy will own the rest….
But how can Geysir Green buy the rest of HS Orka when it itself is more or less bankrupt? These articles (www.icelandtalks.net/?p=643 and http://www.icelandtalk.net/?QK1REEXx) explain that GGE is buying their share of HS Orka for 13 Billion ISK. only 3 Billion will be in cash.
4 Billion will be paid for in shares form their company HS Vetur, which is only just the distribution company for HS Orka. It essentially is shuffling paper form part of the comany to another. No money will be transferred there…
but the other 7 Billion ISK is in the form of a bond or Debenture which will only be payable after 6 years. they are suing the bond as collateral in the bond itself. And it only a promise to pay the amount. If GGE make any money from HS Orka, they will only just plough it back into the company. No extra is being used to pay for it.
only goes to show that this deal is probably the dodgiest deal since… well since the deal to privatise the banks or to Damn most of eastern Iceland to persuade alcoa to come and plant their smelters here!
oops the second link is wrong!
Here it is http://www.icelandtalks.net/?QK1REEXx
Every income from a natural resource is free lunch to it’s owner. Giving free lunch to a private company is just another avoidable tax for people. (Who are the only true rightful owners of natural resources). But, it is still not so important who owns natural resources and natural monopolies. It is important, who collects the incomes from this property (rent). Iceland can collect this money same way they do in Russia and Alaska, US. By Resource-Rent-Tax, which is 90% in Russia and 25% in Alaska for oil incomes.
yep, privatization as the magic bullet to solve all kinds of problems has become quite popular recently. As troubling as this robbing of the public may seem, as logical is it. This small story by Bertold Brecht illustrates:
THE HELPLESS BOY
Mr. K. talked about the bad habit of silently allowing an injustice
suffered to eat at one and told the following story: A boy was crying to
himself and a passerby asked what was wrong. “I had saved two dimes for the movies,” said the boy, “when a big lad came and grabbed one from me,” and he pointed at a lad who could be seen some distance away. “Did you not shout for help?” asked the man. “I did,” said the boy and sobbed a little more loudly. “And didn’t anyone hear you?” the man went on, stroking him fondly. “No,” sobbed the boy and looked at the man with new hope. Because he was smiling. “Then give me that one as well,” said the man and took the second dime out of the boy’s hand and walked away unconcerned.
So I guess we have to cry and fight a bit more to end this robbery.
First of all, foreign ownership is not evil. At all. I would rather see foreign companies in charge then local “cowboys” who didn’t give a damn about their own country.
Second, ALCOA owns smelters for a long time but this is real investments (contrary to banks “expansion”). And whilst ALCOA gets all trouble – to finance, manage, take care, develop etc. – Iceland gets “easy” money – taxes, jobs, electricity sales etc. So see my point above.
Third, I would be much more concern about Geysir Green Energy crooks (you just need to look at their site, management section to see all names –
http://www.geysirgreenenergy.com/about/board-of-directors/) than about Magma. At least Magma hell more transparent – with all data available at their site. GGE last annual report (and the only one) is for the year 2007.
So I can say for sure that this is real babble company.
Forth. The story at Magma site is very different.
http://www.magmaenergycorp.com
And most interesting is these words
“HS Orka is the largest privately owned energy company in Iceland”
No need to say that Magma thinks they will owe 48% –
” If both transactions conclude, Magma would hold a 43.1% direct interest in HS Orka and an option to acquire a further 5% stake for a total of 48.1%.”
Everything at their website.
Fifth. It’s not the sale that is horrible – it’s the price. But as I say – I don’t believe a single word from local politicians and “businessmen”.
130 years… By then, HS Orka’s ownership will have changed 17 times, it will have been re-nationalised 4 times during 12 recessions, re-privatised 5 times, used as collateral 3 times during 6 economic bubbles, and assets requisitioned twice during 3 wars. 130 years…
The first chapter shouldn’t take long. Ross Beaty’s (Magma Energy’s founder, chairman and CEO) stated plan is to expand Magma Energy as quickly as possible through acquisitions. This is apparently his standard business model and he typically sells his natural resources companies at enormous profit after they’ve been expanded (eg Northern Peru Copper sold to Chinese mining firm, Global Copper Corp sold to Teck Resources Ltd, etc). Global capitalism at its purest.
Alda, this is exactly what I’ve been warning of all along. It’s what ALWAYS happens when the IMF/World Bank wrecking crew take over a country’s economy, and they always do it through debt. You were set up via a chain of market manipulations. The same is being done elsewhere — even to the US now. Nobody is safe from these ghouls.
I refer anyone who wants to know more to Naomi Klein’s “The Shock Doctrine”. There are many other sources, but her book is the best place to begin.
Lee.
Do you think Geysir Green Energy is producing anything? But – contrary to the Magma – they even didn’t pay anything for the public property. They just got it for free.
So the root of the problem is much more deeper than “sales of Iceland to foreigners”.
And if there was a really independent investigation and court – I’m sure that Suðurnes Power Company could be back in public hands in no time. I don’t think it requires rocket science to prove that GGE deal was a pure fraud. Just the guts and the will to do that.
And only after that we could talk with Magna about the price
Oops, there goes the neighborhood. ..and those awesome negotiating skills are on display again! What next? Maybe they will add a few amendments and call it a great day for Iceland. They will say anything. Why not? There are no consequences.
When Mr Oddfellow nationalized the banks this whole process was set in motion. Bankruptcy was the only other option on the table at the time.
Wasn’t it just a couple of days ago that the gov indicated its firm conviction to do whatever it took to save the natural resources from foreign exploitation a la the Icesave agreement? Barely a week goes by and the exact opposite begins to happen. The gov has no shame, none. My dad told me that a week prior to the bank collapse last year he was driving out in the country listening to Mathiesen (finance minister) on the radio telling everyone that the banks were fine. Any faith in these people is misplaced, as far as I am concerned.
This is just a part of a big global process that is happening right now. Read Arundhati Roy about what is going on in India and globalization in general. Debit slavery is the new model for the new century. Here (Fl), there (Iceland) and everywhere.
Iceland was the canary in the coalmine. The ‘free market system’ will kill the nation state. Others soon to follow.
It looks like the US will be going bankrupt soon (maybe by next spring or sooner). When that happens Iceland might not seem like such a bad place after all. I’m prepping my sailboat for an Atlantic crossing just in case
Kris
Too bad you can’t make them take the banks (and associated debts) as part of the deal.
Kris – this government seems to be trying to salvage what it can in this matter – and just so we’re clear, Árni Matt is not in the government any more.
The Ministry of Finance asked for an extension on the deadline today until the end of August. Steingrímur J. – Finance Minister for the Left-Greens – is trying to find ways to have the government buy the share that is up for grabs, just so HS orka doesn’t slip into private hands.
Send us your best vibes, please, everyone!!
We don´t need good vibes we need expirienced honest people with skils, we have none in this country.
I stand correct, we have in this country, but not in the goberment.
I’m sorry but Magma is going to buy out shares of Geysir Green Energy. So this is just a change of private owners.
And – as option – might get shares of OR (not Oregon but Orkuveita Reykjavikur).
You can also check HS Orka site
http://www.hsorka.is/HSCompanyInfo/HSCompanyOwners.aspx
Either their site admin is lazy or info in your post is not correct.
Like
But on the site:
Orkuveita Reykjavíkur has 1.014.563.232 shares or 16,58220%
etc.
PS. I don’t trust reporters as well.
((((((((((((((vvvvvvvvvviiiiiiiiiiiibbbbbbbbbbbeeeeeeeesssssss)))))))))))
good ones. with peace and solidarity thrown in.
It’s sort of odd. The Icesave thing is like $4 Billion. You are worried about Magma Energy which has a market cap, after a significant run up, of $450 million. I think they have $100 mil in cash. Why don’t you email them and ask them to explain themselves?
Toronto Exchange:
http://cxa.marketwatch.com/tsx/en/market/quote.aspx?symbol=mxy
SEDAR filings:
http://www.sedar.com/FindCompanyDocuments.do
Home page:
http://www.magmaenergycorp.com/s/Home.asp
They seem to be a developement company, so they may be out of business when they run out of cash, time, and luck. The founder seems to be the same person behind Pan American Silver which is reasonably well regarded.
“Lee.
Do you think Geysir Green Energy is producing anything?”
Well, although Geysir Green Energy’s marketing refers to “subsidiaries operating across the geothermal value chain”, the company is actually a “private equity firm specialising in investments in mergers and acquisitions”, so I suspect its main product is return on investment.
Alexander – yes, Reykjavík Energy is being made to sell their share after the ruling of the competition authority. That’s what this dispute is all about.
Ljósmynd DE said
“From our experience in Germany, the privatisation of utility companies, particularly energy companies, has lead to higher prices and worse service. And as the making of profits is primary objective, cost factors like the maintenance of infrastructure such as power lines, is generally being neglected.”
Hmmm this equates *perfectly* with what has happened in New Zealand as well over the last decade when a “free market” in electricity was created. Don’t believe me: google and you will get stories of overcharging, power shortages, under investment in infrastruture, and even market manipulation.
Lets be honest, most utilities are not a true free market, and most countries utility privatisations are badly conducted as well. The overseas ownership aspect is just a side issue.
Modest electricity prices and associated geothermal heating is something Iceland should cherish.
Excellent discussion, everyone!
@D_Boone,
I disagree. If the owners remained in Iceland (which is a small community) and really tried to screw their neighbours, then life would get pretty uncomfortable for them. I don’t imagine life is very comfortable for the Bjoggies or for Davið Oddsson just now.
Furthermore, if the ownership remains in Iceland, the profits get spent in Iceland. If the ownership goes overseas, the profits are money lost out of the Icelandic economy permanently.
That’s how countries get impoverished, how wealth migrates from the poor world to the rich world.
Nationalisation or co-operative ownership or not-for-profit trusts have to be the best models for utility ownership anywhere, whether that’s Iceland or New Zealand or Germany or Scotland.
Excellent points, Simon. And I agree – this is a great discussion!
Iceland going down hill fast slaves to foreign creditors/owners, is not the Ronnie Reagan-Maggie Thatcher /Peoples Republic of International Globalisation Capitalism quite the Neo Con Agenda but, on the bright side look forward to increased electricity bills unless you are Alcoa for instance keep the Red flag flying there comrades.
yours
Kevin O’Connor Party member 001 of the Irish Republican Socialist Party
Don’t worry: you’ll able to power the country by using the spinning coffin of Halldór Laxness as a turbine!
Seriously, this reads like something out of one of his novels: as if the robber barons of the world have read Iceland’s Bell, and decided to use the actions of the villains of the novel as a guide.
After the deal is examined thoroughly perhaps the Icleandic people could decide for themselves directly if they approve or not.
Allowing representatives to do such a deal may be OK (I’d doubt it) but if not then Icelanders should just throw a fokking fit and just not allow it to go forward, remove the representatives, or enact a 10000% tax on the deal, or whatever and just gain control of your own destiny.
The issue I have been reading about over and over here is should Iceland play nice and stay in the game or go berserk and leave the corrupt game behind come good or ill?
It is in fact getting extremely stupid for Iceland. Selling off your geothermal energy for yourselves in one thing, giving it over to others is no good whatever the price.
I apologize for saying such things, as it is sort of dramatic and not my business. We in the USA are facing similar bizarre choices. Our home foreclosure rate is up and growing, which set off this international chain of events in the first place. Nothing is really being done about it. There are limits, just what they are I do not know.
I didn’t know that Western Ham is an Icelandic football club. Or villas somewhere in the Caribbean has 101 post code
Simon, profits can be wasted anywhere – in Las-Vegas for instance. What is left in Iceland are taxes, jobs, infrastructure etc. So from this point only the owner who cares about long term development – not fast “return of investment” like Geysir Freaking Energy – would best for the country. Where it’s Magma, Sigma or People of Reykjaness Coop – doesn’t matter. But this is what politicians are supposed to do – to look into the matter and decide who cares and who just come for easy money.
But as we can see – local politicians fail… That is the problem!
Alda wrote: ‘The new owner will have the Reykjanes peninsula in its grip.’
How do energy companies work in Iceland? If you live in one part of the country can you only buy heat and power from one company or do you get a choice from all the operators?
An activist government could choose to put energy under tight regulation using the excuse that they’re protecting the national interest – that could stop plans by companies to increase prices or cancel regional development. And if they are clever, planning regulations could stop any new developments that aren’t in the national interest.
But you have to do something, you can’t end up like the UK with a fragmented, ridiculously expensive, (foreign) privately-owned power supply run by companies who have no interest in the long term or customers.
Mike.
Mike.
Keep in mind – this is the country of 300,000 people! And basic infrastructure was set up when there was one “operator”.
There is no such thing, for instance, like long distance calls. All call within Iceland are “local”.
I can buy Internet service from several “operators” as this is technically easy – although traffic goes through Siminn* cable anyway. But it’s somewhat more difficult (not saying about sense) to get heating/electricity from different operators withing such small and centralised system.
*Siminn – the first and only communication company until recently.
Simon Brooke is definitely on the right track. But there’s an interesting new twist/update on his cooperative solution t – an Energy Pool – that I outlined at the All Energy show in Aberdeen recently.
http://www.slideshare.net/ChrisJCook/energy-pool-20-05-2009
1/ Keep the asset in Iceland’s ownership as steward/custodian;
2/ allocate a managing partner (the existing company?) a reasonable proportional share of production;
3/ pay off the conventional debt with an “energy loan”, which is then repaid over a period of years in energy;
4/ any balance of energy produced is an “Energy Dividend” to all Icelanders.
The energy loan simply consists of issuing Units redeemable in (say) 10 Kilo Watt Hours – rather than in something entirely worthless like another dollar bill….
The outcome is an interest free loan to Iceland; and an investment in energy for investors… and who thinks energy will get cheaper….
It’s not Rocket Science.
Alexander, among the reasons for this mess are EEA rules about different companies for generating and distributing electricity. That is why you get HS orka and HS veitur, instead of Hitaveita Suðurnesja and that is why Rarik had to set up Orkusalan etc.
It is possible for me, in the Suðurnes region, to buy electricity from a variety of energy companies but as it has to go through the grid I´ll always have to pay HS veitur for the distribution.
There are also EEA rules about ownership etc. and that is why Orkuveita Reykjavíkur, as a possible competitor to HS orka is not allowed to own a large share in HS orka and why other companies might be prevented from buying shares in the company.
Moderating comments the do not agree with your world view is certainly your choice. To me it is contra productive, think to your golden decade, if the Iceland populace would have questioned your govt as to the sustainability of the “nordic tiger” obviously you would not as a country be in the state you are now.
That said, your choice, and I do wish you well.
-arcsin
Arcsin – I approve loads of comments that do not agree with my world view. I don’t agree with a some of the commenters in this thread, for example. I just make a point of not approving comments from belligerent assholes, or comments that show a profound lack of understanding of the topic at hand (mostly because I usually don’t have time to set people straight and I want to avoid misunderstandings).
But then again, you probably know all that. You have read the comment guidelines, I presume?
There seems a fair degree of understanding and consensus of this issue on this forum.
Does this extend to the Icelandic people, or they more fragmented and unsure?
alda: I made a comment totally on line with the topic(“And while we’re looking the other way”) about how acctually we are looking the other way now. Because as much as this is a very impotrat matter, the situation with Icesave is at this very moment much more important and the hole week the goverment in complicity with the media has managed to keep it under the watter, and we fell for it too. but it is beeing signed and accepted as we speak. While in britain they have been saying that the “emandments” or better say foot notes have NO legal value, maybe you consider my comment out of topic, hope is not the case that you consider me an asshole (“I just make a point of not approving comments from belligerent assholes”) but I con sider of great importance be kept informed about Icesave and continue with the disscution. Cheers!!
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