Blöndustöð (Blanda Hydroelectric Power Station) Construction of the hydroelectric power station began in 1984, however it was 1992 before it was in full operation.

The river Blanda was dammed at Refjatjarnarbunga n the middle stretches of the river. It was also dammed at the source of Kolkukvísl a little to the west but it flows into Vatnsdalsá. These dams created a lagoon, which is 57 km2 and has a capacity of 400 GI. From the dam at Kolka water is directed through channels almost 25 km in length to the intake lagoon at the power station.

Vegetation covered a large part of the area, which was inundated by both the lagoon and the intake lagoon at Blöndustöð. A contract was made with the local population to compensate them for the vegetation loss by replanting desert areas on both sides of the Blanda, Auðkúluheiði and Eyvindarstaðaheiði.

Landsvirkun have cultivated more than 3000 hectares of land since 1981, which they maintain by the use of fertilizer. This is the largest cultivation project, which has taken place in the highlands of Iceland.

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