Nearly all fishmeal factories in Iceland now purchase electricity from HS Orka, with the final one — Síldarvinnslan in Neskaupstaður — signing an agreement this autumn. The factories, which can operate on both electricity and oil, have steadily shifted toward electricity throughout 2025 in line with improved national power availability and lower energy prices.
Clear Advantages of Electricity
There are numerous benefits when energy‑intensive industries such as fishmeal factories switch to electricity. First, electricity is a domestic, renewable energy source, replacing imported, non‑renewable fuels and reducing foreign currency outflow. Second, it makes use of energy infrastructure that society has already invested heavily in. And finally, the environmental benefits are substantial: if oil were burned in the quantities required for fishmeal production, CO₂ emissions would be around 25,000 tonnes higher than with electricity — equivalent to the annual emissions of 9,300 petrol cars.
At HS Orka, we are genuinely pleased to support this transition.
Challenges Ahead at Year‑End
All fishmeal factories — except Brim’s plant in Akranes — have been able to operate on electricity in 2025. Akranes is the exception because interruptible transmission is not available there. This is crucial for the factories: with priority (non‑interruptible) transmission, electricity costs double or even triple compared to using oil. Unless changes are made, the same situation will arise in Vestmannaeyjar at the turn of the year.
Þrándur Sigurjón Ólafsson, energy specialist at HS Orka, highlights this issue in an article published on visir.is today.
Ring Connection Has Unintended Consequences
On 6 November, Landsnet announced the completion of a ring connection in the transmission system in Northeast Iceland, adding a new line from Kópasker to Vopnafjörður. However, unless the tariff structure changes, this improvement will have negative effects on the energy transition.
Because Brim’s fishmeal factory in Vopnafjörður is now part of a ring, it no longer qualifies for interruptible transmission and must therefore pay significantly higher transmission fees — making oil cheaper than electricity. Similarly, installing electrode boilers in Þórshöfn becomes pointless, as electricity will always be more expensive than oil under the current tariff system.
A Need for a New Tariff Approach
Landsnet currently bases interruptible transmission availability on whether the N‑1 criterion is met. If more than one transmission line serves a location, only priority transmission is offered.
In his article, Þrándur argues that this methodology must be revised and the tariff structure updated to reflect the realities faced by these industries. In practice, fishmeal factories act as reserve capacity in Iceland’s power system, and it is increasingly important that they can operate as such.
