The community Olafsvik developed centuries ago on a sinonymous cove. It offers a good natural harbour and rich fishing grounds nearby. The harbour was rebuilt and greatly enlarged in the 1950’s and since then Olafsvik is the most productive fishing town on the Snaefell’s Peninsula resulting in thriving fish industry and related undertakings. In later years the tourist trade has grown rapidly and the town now offers a variety of accommodations and cuisine. Whale watching cruises, sea angling and glacier tours from Arnarstapi are very popular. There are many places of interest to explore in the vicinity and the nature of the latest national park Snaefellsjokull is a wonder of contrasts. An old and exceptionally well constructed wooden warehouse, which was built in 1841, is still standing and is the home of the local folk museum and the information centre. Olafsvik, Hellissandur, Rif, Arnarstapi and Hellnar have merged to form Snaefellsbaer with a combined population of nearly 1100 inhabitants.
River Fossa drains the Snaefell’s Glacier. It first runs underground, through permeable pumice layers, until it surfaces in the springs at Gerduberg, where it has assumed the nature of spring fed rivers. During the melting in spring and heavy rain surface water is added. Its drainage area is 10-12 km² and average flow 2,2 m³/sec.
It runs to the north, along the town Olafsvik until it spills into the Breidafiord Bay. Rjukandi is its only really prominent waterfall. Its name is derived from the constant spray rising from it. In 1947, the Parliament passed a law to enable the construction of a hydroelectric power station of 1,8 MW on the river and a high voltage grid to the town and the village Hellissandur. The National Electric Power Works were consigned to plan and oversee the work, and later the operation.
In 1949 all preparations were finished. The designs had changed considerably from the original plans. The budget only allowed for the construction of an 895 kW station, less than half the original size. Two years later excavations were begun and a year later the power station house was built. The rived was dammed just above the waterfall, below the confluence of River Gerdubergsa. It is made of reinforced concrete and the pipeline to the power station is 1½ km long. The total drop from the reservoir to the station house is almost 200 m. The capacity of the reservoir is only a few hours. The dam was ready in autumn 1953 and in 1954 a Pelton generator was installed. The power station was formally inaugurated September 18th 1954. The harnessed water flow is 0,7 m³/sec., which is close to the minimum flow of the river. The power production has repeatedly been interrupted by shortness of water. It was linked to the local power grid in 1974.
The distance from Reykjavik is 196 km by the Whale Bay tunnel.