Not similar increases in energy prices for 14 years

The rise in electricity prices over the past year reflects a serious stationary position in the country’s electricity system. The demand needs to be an increased development as soon as possible, according to Sigurður Hannesson, Secretary General of the Confederation of Industries, in light of announcements which the organization released today.

« We have not seen similar increases in the price of electricity since 2011, » says Sigurður in a conversation with journalist mbl.is, referring to Statistics Iceland’s measurements, which show over a 16% annual increase in electricity at the same time as general inflation is below 4%.

According to Sigurður, the number of people has increased significantly and electricity consumption for various activities has increased in line with this, but there is no consistency with the development of production capacity.

« Unfortunately, we are seeing these increases at prices that are very bad for all Icelanders. We all use electricity every single day. »

« We talk that this is a home -made problem because this is a clear manifestation of the stationary position that has prevailed in recent years in electricity.

Bites in homes and businesses

The effects are extensive, according to Sigurður, both for general consumers and businesses. « In terms of general users, this is in addition to the various other increases that we have seen in recent quarters. Of course, this is bad for households that already have high financial costs. »

For the companies, the situation is even more serious. « We are hearing examples of the fact that electricity prices for companies have actually risen much more than these figures say. We have heard figures of up to 30% increase between years with individual companies, and that is a great difference.

« We, as a community, can’t do things like that. « 

Asked if the government has responded to ensuring the necessary structure, he replies that it is: « Yes, the government has certainly done so for the past 15 to 20 years even. It is a very time -consuming and complex process to build power plants or undertake other energy projects. »

He says the legislation has evolved towards increased complexity rather than simplification.

« We only see it with the Hvamms power plant, which hopefully can start soon. But when energy from that power plant comes into the system after a few years, it will be about 30 years since the preparation of the project began. It goes without saying that we can’t do this.

Hope the family is not coal, oil or gas

Sigurdur says that the most urgent solution is to increase supply. « The main points are more activated, increasing electricity supply, » if nothing is done, the lack of energy will continue to be a problem in the coming years.

« The situation will only be very bad and we as a community will be poorer because it will not be enough electricity to force the value creation needed to maintain the quality of life that Icelanders call for, » says Sigurdur when asked how he will see the development for the next 10 to 15 years if nothing is done.

He also worries that if the situation gets worse, you may need to look for renewable energy resources.

« We need to burn coal, oil or gas to produce electricity to meet the needs of society? I certainly hope that it will not be and I think none of us are interested in that vision. »

Sad position

« We believe it needs to simplify the process of licensing, » he says, adding that the Confederation of Industries has welcomed government action to improve both last term and now. « We are somewhat optimistic when we look forward to the situation that the situation will be reversed, but it also calls for the companies to undertake construction. »

He also points to the role of local authorities. « There is the planning authority and we have now seen a few years the struggle of municipalities with the state and with the energy companies to divide the cake. It has also delayed construction and involved. It also plays into the fact that we are in this sad position. »

Finally, Sigurdur says that the Confederation of Industries has been in constant contact with the government. « We have been in very regular communication in recent years, we have been in regular and very constructive conversations with the government on these issues, » he points out.

« We saw a very positive step in the last electoral period for reform and we are also seeing now this term of office how the minister of the issue has been clean.