Kárahnjúkar Hydropower Project is a hydroelectricity plant in eastern Iceland designed to produce 4,600 GWh annually for Alcoa's Fjardaál aluminum smelter 75 km to the east in Reyðarfjörður. The project, named after nearby Mount Kárahnjúkur, involves damming the Jökulsá á Dal River and the Jökulsá í Fljótsdal River with five dams, creating three reservoirs. Water from the reservoirs is then diverted through 73 km of underground water tunnels and down a 420m vertical penstock towards a single underground power station. The smelter became fully operational in 2008 and the hydro-power project was completed in 2009. It should be stressed, however, that no country we know of has used so many ressources to minimize the environmental impact. In addition, those involved have done their best to provide and allow access for people and let them judge on their own.

The Kárahnjúkastífla Dam is the centerpiece of the five dams and the largest of its type in Europe, standing 193 m tall with a length of 730 m and comprising 8.5 million cubic m3 of material. Surplus water from the dam on its way to Jökulsá á Dal.