The Kárahnjúkar Hydropower Project, named after Mount Kárahnjúkur, is located in Iceland. It is a hydropower dam project with a reservoir, 60km of underground watertunnels, a large turbine cavern inside a mountain, and power lines to an aluminium smelter.
The project involved damming two rivers in eastern Iceland—the Jökulsá í Fljótsdal, source to the Lagarfljót lake, and the Jökulsá á Dal aka Jökulsá á Brú—to produce hydroelectricity to power a new aluminium smelting plant completed and built by Alcoa near the town of Reyðarfjörður providing about 400 jobs to the local economy of Fjarðarbyggð. The dam was considered the largest single construction project in Iceland, currently operational and total completion scheduled for 2009.
A considerable portion of the project is underground. The water from Hálsalón is channelled through a network of underground tunnels feeding into a 450 metres (1,500 ft) deep vertical steel lined penstock, then into a turbine hall/power station built deep inside a mountain at Fljótsdalur. Five dams have been or are being built, of which by far the largest is 193 m high and 730 m long. The Hálslón reservoir will be 57 km² on the surface (about the size of Manhattan island in New York), and provide a flow of 110 m³/s, enough to generate 4,600 GWh a year of electricity, at a nameplate capacity of 690 MW. This corresponds to a capacity factor of 76%, which is relatively high for a hydroelectric facility.
The project is funded by Landsvirkjun (The National Power Company), which operates the dams. The Italian company Impregilo is the largest contractor working on the dams. The total cost (2005 estimation) for the hydropower project will be 90 billion ISK (about 1.0 billion EUR/1.2 billion USD, 3 000 EUR per citizen of Iceland). The penstock was built in situ by the German company DSD-NOELL (Würzburg). In total, more than 4,000 tons of steel were used for the steel liner.
The project was documented in a MegaStructures program of the National Geographic Channel, and the Discovery Channel’s Extreme Engineering, along with mention in the Sigur Ros 2006 documentary “Heima” (At Home), where the band played at a protest of the building of the dam.