ON Power And Norðurál Sign A Power Purchase Agreement

Representatives from Reykjavík Energy, ON Power – a wholly owned subsidiary of Reykjavík Energy – and Norðurál, today signed a new power purchase agreement (PPA) for 150 megawatts to the Norðurál aluminium plant at Grundartangi. The agreement is for a term of up to five years and replaces previous electricity sales contracts between Reykjavík Energy and Norðurál, set to expire in the coming years.

As part of the agreement, Reykjavík Energy and Norðurál have also agreed to cease arbitration proceedings initiated due to differing interpretations of provisions in prior contracts.

The new agreement, which will take effect in Q4 2026, is expected to have a significantly positive impact on profitability of electricity sales – exceeding the projections published in Reykjavík Energy's 2025–2029 financial forecast, published in a market release in October 2024. The next financial forecast will be published in Q4 2025.

Sævar Freyr Þráinsson, CEO of Reykjavík Energy, states that this agreement delivers on the goal set out in the aformentioned release: to secure improved pricing for electricity sold to power intensive industries.

“At the same time, by extending cooperation with a key customer – and a business that creates substantial value for Icelandic society – we are opening up new opportunities for Reykjavík Energy to be an eneabler for a sustainable future,” says Sævar Freyr.

The parties to the agreement have issued the following joint release :

Contact :

Sævar Freyr Þráinsson
CEO
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