The Kárahnjúkar power station project takes its name after the twin hills named Kárahnjúkar where the lake formed from the dam will be. The hydropower project basiclly comprises the damming of the glacial river Jökulsá á Dal at Mt. Fremri Kárahnjúkur and the creation of the water-storage reservoir Hálsalón. Damming the glacial river Jökulsá í Fljótsdal creates another small reservoir, Ufsarlón.
This is an area that has not been accessible to tourists for the most parts until this project began. It is a part of Iceland's highland and has spectacular nature in both flora and fauna. Wild gees and reindeer among many more can be found there.