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Transmission & Distribution

Electricity is the main source of power in our daily lives. Convenience and cleanliness are among the most important advantages of using electricity from renewable energy sources. It is simple to access this virtually unlimited supply of energy at any home in Iceland. You simply plug an appliance into the mains supply, turn on the switch and run the appliance as long as you wish

Electricity is transmitted mainly through overhead lines or underground cables. Due to the resistance of the transmission wires, there is always some loss of power through the heating effect of current. The electricity transmission systems must be designed in ways which reduce this loss as much as possible. Distribution of electricity is a matter of energy security of the country as well as a comparative advantage is respect of attracting foreign industries.


RARIK (Iceland State Electricity) was established on 2nd April, 1946, and started operations in January the following year. RARIK has worked on developing various power projects throughout Iceland, such as the electrification of rural areas and interconnecting districts with high voltage system. RARIK also laid extensive system of transmission lines between the country's various regions, constructing an integrated power grid stretching around all of Iceland. RARIK has been the leading force behind these developments, and thanks to the extensive interconnected power grid, the whole country can now benefit from every harnessed hydro-electric or geothermal power source.

The history of RARIK is closely connected to the republic's own history, as electrical and industrial development went hand in hand in Iceland. By devoting its energy to building an electric power transmission and distribution system for the country's rural as well as urban areas, RARIK has played an important role in the development of individual regions in Iceland.

RARIK ltd, a corporation owned by the government, was established August 1st 2006. It then took over management of The State Electric Power Works.

On establishment the company’s main objective was to procure sufficient electrical power to the general public and industries in a favourable manor. The company has had an important role to play in procuring, distributing and selling electric power.

With the onset of new energy laws in 2003 and privatization and monopoly regulations it was decided to establish a subsidiary, Orkusalan. Orkusalan’s principal function is to generate and sell electric energy on RARIK’s behalf. Orkusalan, 99.8% of which is owned by RARIK ohf, was founded in the beginning of 2007. It manages 5 power plants, the Rjúkanda power plant, the Skeiðfoss power plant, the Grímsárs power plant, the Lagarfoss power plant and the Smyrlabjarga power plant. The total capacity of these power plants is 36 MW, the Lagarfoss power plant being the largest. The company’s shares in power plants are worth 6 billion ISK.

With changes in electric power laws RARIK quit selling electricity. Landsnet hf was established on January 1st 2005, it’s primary role being transmission of electricity in the country. A majority of RARIK’s main line system was sold to Landsnet hf. RARIK now owns a 22% share in the company.

Today the company’s main objective is distribution of electric power and has gradually been working on building distribution networks in rural areas, 90% of which belong to RARIK. RARIK’s distribution network reaches to Western, Northern, Eastern and South Iceland. It also reaches 43 urban areas all over the country. The length of the high voltage distribution network is about 8000 km. Originally all high voltage distribution was via overhead power lines, but now 35% of the system is underground cables. RARIK’s shares in utilities are worth about 17 billion ISK.


Landnset hf is the owner and operator of Iceland´s electricity transmission system-the grid. We began operations at the start of 2005 on the basis of the Electricity Act passed by the Icelandic parliament in the spring of 2003. The company operates under a concession arrangement and is subject to regulation by the National Energy Authority, wich determines the revenue cap on wich our tariff is based.

Safety and work environment

We are committed to ensuring the highest level of safety in all our activities. To this end, we have established rules to promote a safe and healthy working environment reflecting respect for all those who carry out work for Landsnet at any given time.

In harmony with the environment

Landsnet is committed to treating Icelandi´s nature with respect, avoiding all unnecessary land disturbance and taking due account of the environment in all our activities. We constantly keep abreast of developments and progress in the design of transmission system and strive to use the latest technologies where appropriate, whilst always minimizing environmental impact.

Our key policy aims are profitable and efficient operations, active competition, a high level of community awareness, effective management of the electricity system and efficient grid development.

Orkusalan offers homes, companies and organizations competitive prices and services designed to meet their needs for simple and efficient procurement of electricity. Orkusalan service centre employs a team of experts whose aim is to make electricity transactions with homes and businesses as simple, easy, and cost-effective as possible.