Energy Resources in Iceland

ORKUSTOFNUN National Energy Authority

Energy Resourcesin Iceland

Lárus Elíasson stepping in for:

Sveinbjörn Björnsson

Past and PresentPossibilities and Visions

Energy Resourcesin Iceland

Lárus Elíasson stepping in for:

Sveinbjörn Björnsson

Past and PresentPossibilities and Visions


ContentsContents

• Administration• Economy and energy policy• Energy resources• Energy utilization• Energy and the environment• Future utilization• Summing up


Administration of Energy AffairsAdministration of Energy Affairs


Organisation of the Icelandic Electric Sector

The NationalPower

CompanyLandsvirkjun Regional

EnergyCompanies

MunicipalEnergyUtilities

Electrical SafetyAccreditation

StateElectricUtilityRARIK

Orku-stofnun(NEO)

Invest in IcelandEnergy Marketing

ParliamentGovernment: Ministry of Industry Municipalities

ÍSOR(Iceland

Geosurvey)

1998 o.toflure.ppt


Role of the National Energy AuthorityRole of the National Energy Authority

• Contracts and conducts research in the field of energy– On hydrological conditions,– on the hydrological budget of Iceland’s freshwater and

geothermal resources, – as well as data on various natural and environmental

processes • Accumulates and maintains databases on the

energy resources• Disseminates knowledge on the exploration and

exploitation of geothermal resources to developing nations

• Administers energy affairs and advises the minister


Financing of Energy ResearchFinancing of Energy Research

GovernmentBudget

GovernmentBudget

EnergyIndustryEnergyIndustry

PrivateConsultants

Energy Management

Energy Management

Energy ResearchEnergy

Research

Director Generaland

Services

Director Generaland

Services

Orkustofnun


ISOR – ICELAND GEOSURVEYISOR – ICELAND GEOSURVEY

ISOR is a state-owned research and service institution in the field of energy and natural resources.

ISOR does not receive any direct financing from the state. It operates on the basis of research contracts with the energy companies, the state and others, like any other company on the market.

ISOR has 50 employees of 40 whom are highly qualified experts of international standard


UNU Geothermal Training ProgramUNU Geothermal Training Program

• Operated in Iceland at Orkustofnun since 1979

• Assists developing countries in geothermal exploration and development

• Offers six-month specialized courses

• Total number of students 1979-2003: 300


Icelandic Geothermal Activities AbroadIcelandic Geothermal Activities Abroad• Africa

– Burundi– Cape Verde– Djibouti– Kenya– Uganda

• Europe– Azores– Croatia– Georgia– Greece– Hungary– Poland– Romania– Russia– Slovakia– Slovenia

• Americas– Ecuador– El Salvador– Guadeloupe– Guatemala– Honduras– Nicaragua– USA

• Asia– P. R. of China (Tanggu,

Yunnan, Beijing, etc.) – Indonesia– Philippines– Turkey


• Coordinates export of geothermal know-how and experience

• Established in 2000 reinforcing previous initiatives• Offers total solutions to harness geothermal

resources• Owners all major actors in geothermal in Iceland:

• Power companies• Consultants• Institutions


Economy and PolicyEconomy and Policy


Sustainable Resources: Backbone of the Icelandic Economy

• Iceland is highly dependent upon natural resources– Fish stocks– Energy sources

• The country’s exports of goods and services– still almost 50% fish and fisheries products– and currently about 25% products of energy-intensive industry


Energy Utilization Policy of the Energy Utilization Policy of the Government Government

““To promote utilization of IcelandTo promote utilization of Iceland’’s clean and s clean and renewable geothermal and hydropower resources in renewable geothermal and hydropower resources in

harmony with the environmentharmony with the environment””Sustainable development based on Iceland’s renewable energy resources

to stimulate foreign investment

for diversification of the economy

and expand exports

thus improving the living standard of the people


Basic Facts about Icelandic EnergyBasic Facts about Icelandic Energy

• Currently over 72% of all primary energy used in Iceland is renewable

– Highest ratio in OECD - and indeed in the world

• Electricity production and other stationary use of energy in Iceland is totally carbon free !

• Oil still needed for almost 30% of the primary energy demand– About half to operate the fishing fleet– The other half mainly for motor vehicles

• Iceland “cleaned up” prior to Kyoto– Fossil fuels eliminated from space heating– Therefore problems with Kyoto!– Acknowledged in Marrakesh


Objectives of the Electricity ActObjectives of the Electricity Act

• Create conditions for competition in generation and sale of electricity

• Promote efficiency and rationalisation • Ensure security of the system and consumer

protection • Economical electricity system


Energy UtilisationEnergy Utilisation

Blue Lagoon


Primary Energy Consumption in Iceland 1940-2001Primary Energy Consumption in Iceland 1940-2001

0

10

20

30

40

50

60

70

80

90

100

110

120

130

140

1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000

PJ

0%

20%

40%

60%

80%

100%

1940 1950 1960 1970 1980 1990 2000

HydroHydro

GeothermalGeothermal

OilOil

CoalCoal

PeatPeat

HydroHydro

GeothermalGeothermal

OilOil

CoalCoal

Proportional consumptionProportional consumption


Electricity consumption 1950-2002

0

1.000

2.000

3.000

4.000

5.000

6.000

7.000

8.000

9.000

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000

GW

h/a

Power intensiveindustry

General consumption


Development of Energy UtilisationDevelopment of Energy Utilisation

• First phase - until the 1970s– Electrification of the country (mainly by

hydropower)– Harnessing of most accessible geothermal fields

• Second phase - after 1965– Development of power-intensive industry

• Third phase - after 1973/74– Replacement of oil by renewable energy resources,

especially for space heating• Fourth phase - after 1995

– Further expansion of power intensive industry


Energy ResourcesEnergy Resources


Potential for Electricity Production (TWh/a)Potential for Electricity Production (TWh/a)

7%

1,4

20

Geo-thermal

23%

7,0

30

Hydro Together

17%In relation to econ. + env.

8,4Production in year 2002

50Economic and environmentally benign

0

5

10

15

20

25

30

Potential Production

Hydro

Geothermal


Icelandic Electricity Potential in PerspectiveIcelandic Electricity Potential in Perspective

• Electricity potential of Iceland:– 50 TWh/a

• Average use in OECD:– 8 MWh/a per capita

• Electricity potential of Iceland:– For 6 million OECD citizens

(Icelanders are fewer than 300 thous.!)– More than the needs of e.g. Denmark


HydropowerExisting and Potential

HydropowerExisting and Potential

Existing Power PlantsPlanned Power PlantsPotential Sources

ORKUSTOFNUN National Energy AuthorityORKUSTOFNUN National Energy Authority

Geothermal Electricity PotentialGeothermal Electricity Potential

High temperature areasPower Plant (in operation/planned)

Krafla 60 MWe /160 MWe

Bjarnarflag 3 MWe /40 MWe

Nesjavellir 90 MWe

Grændalur 0 MWe /20 MWe

Svartsengi 48 MWe

Reykjanes 0 MWe /100 MWe

/ 120 MWe + 2x40 MWe

GenerationStatus 2003: ~ 200 Mwe Near future: ~ 500 Mwe


Iceland as a site for Deep Drilling


Geothermalreservoir

at very high energy state

2,5 kmMax. sofar in Iceland

4 - 5 kmTarget depth


Electric Power Generation

Conventionaldry-steam well IDDP well

Downhole temperature 235 °C 430 - 550 °C

Downhole pressure 30 bar 230 - 260 bar

Volumetric rate of inflow 0.67 m3/s 0.67 m3/s

Electric power output ~ 5 MWe ~ 50 MWe


Energy and the EnvironmentEnergy and the Environment


The Environmental Impact Assessment Process, administered by the State Planning Agency of Iceland

(PA)

The Environmental Impact Assessment Process, administered by the State Planning Agency of Iceland

(PA)

PA’s review of the SR Preparationof EIS* The PA’s review of EIS Appealing process

4 weeks 2 w. 6 w. 4 w. 4 w. 8 w.

Scoping report (SR)introduced

PA’s decision on the

Scoping report

The EIS is made available for the

public

Deadlinefor public

comments

PA’s decision

Deadlinefor appeal

Minister for the Environment’’s

decision

EIS to thePA

* EIS: Environmental Impact Statement


Master Plan (MP) for Utilization of the Energy Resources

Master Plan (MP) for Utilization of the Energy Resources

• Proposed power projects are evaluated and categorized on the basis of– Energy efficiency and economic interests– Implications for regional development– Impact on the natural environment, cultural

heritage sites, grazing, fishing, hunting and recreational activities

• First phase, including all the major glacial rivers and the basic high temperature geothermal areas is finished


Space heating by source 1970-2002

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1970 1975 1980 1985 1990 1995 2000

Fossil fuelsElectricity

Geothermal87%

11,5%1,5%


Origin of Greenhouse Gas Emissions in 2000

TransportTransport

Fishing vesselsFishing vesselsIndustryIndustry

GeothermalGeothermalHouseholdsHouseholds

OtherOther


Power ProductionPower Production

Aluminum ProductionAluminum Production

000

444

888

121212

161616

CoalCoal OilOilOil Natural gasNatural gas Hydro powerHydro power

CO2 emissions from primary aluminium smelting by energy source in kg per kg aluminium produced

CO2 emissions from primary aluminium smelting by energy source in kg per kg aluminium produced

Kg CO2 / kg AlKg CO2 / kg Al

E.g. Iceland!


The FutureThe Future


Potential Large Scale Use of ElectricityPotential Large Scale Use of Electricity

• Energy intensive industry– Aluminum smelters etc.

• Direct export via submarine cable– Is export of “raw material”– Hardly economically viable

• Production of synthetic fuels (hydrogen)– When technically and economically

feasible


Power-Intensive Industry: Recent projects• 1997

– Expansion of ISAL aluminium plant (at the time the only one) from 100,000 to 160,000 tonnes/year

• 1998– A new aluminium plant, Norðurál, with initial production capacity

60,000 tonnes/year• 1999

– Expansion of the ferrosilicon plant from 70,000 to 115,000 tons/year

• 2000– Decisions on increasing Norðurál to 90,000 tons/year and of ISAL

to 200,000 tonnes/year• 2002/2003

– A contract signed with Alcoa on a new 322,000 tonnes/year aluminium plant in Reyðarfjörður

• 2002/2003– Decision on a further expansion of Norðurál to 180,000

tonnes/year


Electricity Use in the Next Decade or soElectricity Use in the Next Decade or so

5

10

15

20

25

General consumption

Current power intensive industry (PII)

PII in progress

Synthetic fuels(acc. to Icelandic New Energy)

Fjarðarál(Alcoa)

Alcan

Possible further PII

Approx. half of power potential

Norðurál(Columbia Ventures)

Now!

TWh/

a

1990 2000 2002 2004 2006Year

2008 2010 2012 2014


Electricity needed for replacing oil with hydrogen (assuming fuel cell efficiency)Electricity needed for replacing oil with hydrogen (assuming fuel cell efficiency)

Current domesticuse of oil and

gasoline

Hydrogen needsassuming fuel cells

Electricityfor

electrolysisThousand tonnes

annuallyThousand tonnes

annuallyGWh/a

Cars 200 30 1.600Ships 230 50 2.700Total 430 80 4.300

Equivalent to new Karahnjuka

plant for the Alcoa smelter


70°

Bergen

Greenland

Edinburgh

Reykjavík

ReydarfjörðurIceland

Orkney

Germany

60°

50°

1170 km

2000 km760 km

1250 kmShetland

Faroe Islands

Scotland

Norway

Denmark

Sweden

NetherlandsEnglandGrain

Ireland

20° 0°10° 20°

Submarine CableSubmarine Cable


Summing upSumming up


Summing upSumming up

• Iceland has (relatively) abundantrenewable energy resources– These must be used to a greater extent to the

benefit of Iceland and mankind taking due consideration of the environment

• Iceland has experience and capabilities in geothermal and hydro power– We hope to export this know-how to a greater

extent– Even participate financially in foreign energy

projects

Documents

Energy Resources in Iceland