Lower Electricity Prices Bring Relief for Horticultural Farmers

2026-01-25 - 21:07

Electricity costs have eased for many horticultural farmers at the start of the year, offering some relief to an industry facing rising inflation and wage pressures. As reported by RÚV, the reduction follows a drop in overall electricity demand after aluminium producer Norðurál scaled back operations because of technical problems. Another key enterprise, PCC Bakki in Húsavík, halted production entirely last year. What's the Story? Electricity prices fell for many horticultural farmers at the start of the year Reduced power demand followed cutbacks at Norðurál and the closure of PCC Bakki in Húsavík Farmers negotiate electricity contracts individually, not through the Farmers' Association Some growers kept product prices unchanged despite wage rises and 4.5% inflation Electricity accounts for about 25% of operating costs at Friðheimar Salmon farming in Arnarfjörður, Westfjords. Photo: Golli. With less strain on the grid, some growers have seen lower energy prices. Axel Sæland, a flower grower and chair of the horticultural division of the Icelandic Farmers’ Association, said the change has had a noticeable impact for some producers. Sæland emphasised that despite the increased price index and wage increases that took effect at the beginning of the year, the farmers were able to enter the new year with the same prices. Similar views were expressed by Knútur Rafn Ármann, managing director and owner of the greenhouse business Friðheimar. Ármann told RÚV that a fall in electricity prices became clear shortly before Christmas under a contract with HS Orka. Both industry experts, however, warn that the situation might be temporary.