From the CEO

Bjarni Bjarnason

The year 2020 presented us with unusual challenges. Familiar though we may be in dealing with a variety of disasters, natural and man-made, a pandemic was new to our generation. To a certain extent it resembles more familiar disasters in demanding solidarity and hard work, but we have also needed plenty of restraint and endurance.

Just over a century ago, when a previous generation had the Spanish flu to deal with, preparations were underway in Reykjavik to take the giant step of harnessing the Elliðaár River. There was considerable discussion as to how best to do this, ending in the power station building we all know so well. It has now ended its service, having brought our society into the modern world, a world where we are better equipped to deal with such unwelcome guests as Covid-19.

Solid finances enabled a firm stand

The pandemic dealt a heavy blow to the Icelandic business and economic community in 2020. One entire industry, tourism, virtually disappeared, leaving broken businesses and jobless people. Unfortunately such upsets are not all that novel here in Iceland and many were reminded of the situation after the economic crash just over a decade ago. By 2010 the Reykjavik Energy Group's financial situation was dire and its owners – The City of Reykjavik, the Municipality of Akranes and The Township of Borgarbyggd – had to provide an emergency loan to prevent the failure of the company. This memory made it all the more gratifying that we were able to react quickly to the pandemic last spring, increasing our investments to combat growing unemployment. Thus Reykjavik Energy Group's successful resurrection over the last few years enabled it to return to its owners part of what they had provided when it hit hard times.

One thing we learned from that struggle with our financial difficulties was that being forced to make one change can open the door to changing other things at the same time. So the financial trouble was used as an opportunity to make basic changes in the culture of the company and some giant steps were taken, not least in the matter of equal opportunity. Similarly, the changes imposed by Covid-19 are an opportunity for a variety of improvements, both within the company and in society as a whole. We at Reykjavik Energy Group have set ourselves ambitious objectives, which changes due to the pandemic should help us achieve. There are five objectives. All the companies within the Reykjavik Energy Group work together to achieve them, each in its own area, and we made significant progress in 2020.


You can follow the progress of the objectives here at RE's website.

More newly registered EVs than conventional cars

Green transformation in transport is one of our objectives and we have pledged to do our part towards bringing the number of connectable electric cars (EVs) to 40,000 by the end of 2023. In 2020, presumably due in part to three RE Group actions – ON Power developed a country-wide network of charging points, Veitur Utilities collaborated with municipalities to install charging points in public parking areas, and Reykjavik Energy provided grants to multiplex housing associations – more than half of the cars registered that year were , for the first time, EVs.

Another of our five objectives concerns the health and safety of our employees. We keep track of absences due to illness or accidents and, simply put, we need to review this objective immediately. There was very little absence due to illness in 2020, which can most convincingly be explained by the prevalence of telecommuting and increased sanitation, which also greatly reduced the occurrence of everyday infectious diseases. Work-related accidents decreased as did absence due to accidents. Employees have the absolute right, of course, to come home safe at the end of their working day. Over the past year the company has used new methods to strengthen employees sense of their own responsibility in this matter, and provided them with simple systems to evaluate potential hazards in their work environment.

There was an increase in job satisfaction within the Group in 2020, despite the significant turmoil and reorganisation many had to put up with because of the pandemic. The companies in the group provide essential basic services, so we have gone the extra mile in disease preventioin; so far COVID-19 has not led to any disruption in our services. One consequence of the pandemic was that customer service became overwhelmingly electronic, a change we assume will be permanent.

Increased flexibility in the workplace

Telecommuting during the pandemic has demonstrated that we can increase flexibility in the workplace substantially. We have now offered all employees for whom it is relevant, to work from home one or two days a week. Working from home reduces commuting, traffic and emissions. It is also likely to reduce the need for office space though this remains to be seen. The renovation of the west wing of the Bæjarháls HQ is under way. It may be that increased telecommuting will allow us to lease a larger portion of the building than expected.

The fibre optic network has most definitely proved to be beneficial: working from home as we have been doing would be inconceivable without it. The speed of data transfer enables us to connect to all systems, just as if we were in the office. In 2020 more and more municipalities have made use of the network. Competition in the telecommunications market is dynamic, so we are delighted to have reached an agreement with Iceland's largest telecommunication company, Siminn, for access to services via the fibre optic network.

Another dynamic competitive market is electricity. In 2020 many realised that we would need to keep on our toes if the generation of electricity is to remain the strong pillar of the Icelandic economy that it has been for decades. It is gratifying that development at the ON Power Geothermal Park is not only concerned with delivery of electricity, but also allows companies to exploit the many by-products of the geothermal area. In addition to electricity they utilise heat and minerals, such as silicon and carbon dioxide, and there is also a plentiful supply of fresh water available. It is becoming increasingly important to make manifold use of geothermal resources, not simply for financial reasons but also so we can live up to the standards we must set ourselves as to sensible and sustainable use of natural resources.

Hellisheidi is also central to our own business development, as witness the launching in early 2020 of Carbfix plc, a company focusing on developments in carbon sequestration and the resistance to climate change. The extensive knowledge to be found in this start-up has been built up over years of collaboration between Reykjavik Energy Group and the University of Iceland, along with scientists from universities and institutions around the world.

A productive year despite the pandemic

Overall, the year 2020, was successful for Reykjavik Energy Group, despite the pandemic. Operations are financially sound and the general attitude towards the Group indicates a growing appreciation by the public it serves. That bond could be strengthened further, in which regard transparency and respect for the needs of our customers are vital. Reykjavik Energy Group's Annual Report, which is prepared in accordance with international standards of social responsibility, contributes to the conversation which must be kept up as to the Group's performance in its crucial assigned task – what needs improvement and what has been successful.