Reykjavik Energy will face many enormous challenges in the coming years. The company's position and role in the Icelandic energy market inevitably mean it must contribute significantly to the upcoming energy transition. In Iceland, there will be a significant reduction in the burning of fossil fuels and, in their place, renewable and environmentally friendly energy sources will be utilised. In recent decades, the company has focused primarily on geothermal energy in its energy production, although hydropower has also been harnessed. This production will continue and grow, but increased emphasis will be placed on other energy sources, which will be utilised in an environmentally friendly manner in harmony with the community.
The formidable forces inherent in geothermal energy are not easily harnessed. Coexistence with them involves risks, as recent seismic activity in Reykjanes has unpleasantly reminded us. The power plants and other structures of Reykjavik Energy in the Hengill area have not been endangered so far, but the area is active, and it is not impossible that there will be damage from natural disasters in the future. Water reservoirs could also be damaged in such events.
In the development of utility systems and individual structures, such risks must be considered, and efforts must be made to ensure that individual events cannot paralyze essential operations. This requires ensuring that it is possible to access and deliver to consumers electricity, hot and cold water from many locations and through many routes. The same applies to data distribution systems; they must be able to withstand failures, attacks, and other potential disruptions. In all these areas and more, Reykjavik Energy has played a key role and will continue to do so.
The demands and expectations of society on Reykjavik Energy are high and should be. More energy is not the only demand. Environmental demands are also increasing. Among other things, radical changes will need to be made to sewage systems in the coming years to improve wastewater treatment. Reykjavik Energy will also be at the forefront of developing and implementing new solutions to capture carbon dioxide through its subsidiary Carbfix.
Although all these tasks require significant investment and ingenious solutions, there is no doubt that Reykjavik Energy has the capacity to meet them. The staff of the Reykjavik Energy Group will play a key role. Financially, Reykjavik Energy has never been stronger than now. At the end of year 2023, the company's equity was ISK 246 billion, and the equity ratio 54.7%. This has been achieved even though the cost of services to households has decreased in real terms in recent years, in some cases significantly. At the same time, it has been possible to pay dividends to owners.
In 2023, the board of Reykjavik Energy held 18 meetings. A special workday was held in September to develop a new corporate strategy for the group. The corporate strategy was approved for consultation with owners in December and finally approved by the OR board in January 2024.
There were two formal Owners' Meetings in 2023; the annual general meeting in April and an extraordinary meeting for the election of an auditing firm in May.
Following The City of Reykjavik’s adopting a new method for selecting its representatives through a nomination committee, significant changes in the composition of the board of Reykjavik Energy were made at the end of 2022. There were changes in the CEO position at the beginning of April when Bjarni Bjarnason stepped down and Sævar Freyr Þráinsson took over. For these reasons, the board decided that a regular assessment of the CEO's performance was not timely for the year, and an assessment of its own performance would be conducted early in 2024.
