This is an update from our release November 8, 2010. Since Statistics Iceland has not updated wholesale prices from Landsvirkjun and Rarik since 2004 and Eurostat does not include Iceland in its electricity data, electricity prices for industrial consumers are derived by estimating the value based on household average prices. The EUR/ISK conversion utilizes Central Bank of Iceland annual average mid-rate. All figures are EUR/kWh. Note that y-axis commas and data labels in the charts are decimal separators (ex: 0,1500 stands for 0.1500; the reason is a bug in Excel that fails to configure number formatting settings to charts although the spreadsheet itself formats correctly).
Iceland’s price competitive position
Chart 1: Estimated Iceland’s price of electricity to industrial consumers versus EU-27 and individual regions. At 0.0435, Iceland is far below the EU-27 0.0934, Big 4 0.0927, Nordic and Baltic 0.1622 (and includes Iceland which lowers it), Central Europe 0.1230, Eastern Europe 0.2500 and Southern Europe 0.3726.
Chart 2: Estimated Iceland’s price of electricity to industrial consumers versus the Big 4 2011 (note that the chart shows 2012 for the Big 4 but the values here reflect 2011): Germany (0.0900), France (0.0722), Italy (0.1145) and the UK (0.0939).
Chart 3: Yearly change in electricity price. Estimated for Iceland 2011: +15.2%.
Chart 4: 5-year change in electricity price. Estimated for Iceland 2009: -14.6%.
These figures make it even more difficult to understand why Germany – one of the world’s largest operators of energy intensive plants due to its manufacturing and engineering concentration – is investing so little in this economy. Locating energy-intensive plants here would result in cost competitiveness that, given Iceland’s strategic location between the European and American continents – and soon Asia if the polar ice cap really opens up – could literally mean the life or death of firms competing on tight margins (e.g. the automotive and airline industry). Although French, Airbus ought to take a close look at Iceland: “Airbus itself is a truly global enterprise of some 55,000 employees, with fully-owned subsidiaries in the United States, China, Japan and in the Middle East, spare parts centres in Hamburg, Frankfurt, Washington, Beijing and Singapore, training centres in Toulouse, Miami, Hamburg and Beijing and more than 150 field service offices around the world.” Why is not a single unit located here in Iceland?