Energy in Iceland Export opportunities Thorkell Helgason, Ph.D. Director General ORKUSTOFNUN National Energy Authority of Iceland ÞH 15.08.2001

Energy in IcelandExport opportunities

Thorkell Helgason, Ph.D.Director General

ORKUSTOFNUN National Energy Authority of Iceland

ÞH 15.08.2001

Energy Resources of Iceland and its utilization


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Primary Energy Consumption in Iceland 1940-2000


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0

10

20

30

40

50

60

70

80

90

100

110

120

130

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

PJ

Proportional consumption

0%

20%

40%

60%

80%

100%

1940 1950 1960 1970 1980 1990 2000

Hydro

Geothermal

Oil

Coal

Mór

Hydro

Geothermal

Oil

Coal

Electricity consumption 1950-2000


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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

Energy intensive industry

General consumtion

Space heating by source

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1970 1975 1980 1985 1990 1995

Current geothermal share: 85%

Oil Electricity

Geothermal


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Origin of greenhouse gas emissions in 1999

Transport

Fishing vesselsIndustry

Geothermal

Households

Other

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Energy Potential for Electr. Production (TWh/a)

Hydro Geo-thermal

Together

Economic and environmentally benign

30 20 50

Harnessed thereof 2000

6,5 1,2 7,7

In relation to econ.+env.

22% 6% 15%

0

5

10

15

20

25

30

35

40

45

50

Econom.+Environm.

Harnessed


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0 2 0 4 0 6 0 8 0 1 0 0 1 2 0

M W h /year p er cap ita

Unused Economic Capability

G en eration 1996

Ice lan dT ajik istan

N orw ayB h u tanG ab on

C an ad aP aragu ay

K yrgyzstanN ew Z ealan d

S w ed enC osta R ica

C h ileC on go

P ap u a N GL aos

C am eroonA u str ia

G eorg iaB oliv iaA n golaR u ssia

B osn ia-H .B razil

Hydroelectric capability

Source: International Energy Agengy (IEA)

NorwayIcelandCanadaSweden

Luxem bourgFinland

United S tatesAustralia

New ZealandJapan

BelgiumSwitzerland

FranceAustria

G erm anyDenm ark

NetherlandsCzech RepublicUnited K ingdom

IrelandKorea

ItalySpain

G reecePortugalHungary

PolandM exicoTurkeyO ECD

0 5 10 15 20 25

M W h per cap ita

Electricity production 1997Iceland 2000

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Icelandic 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 Denmark


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Basics Facts about Icelandic Energy

• Currently 2/3 of all primary energy is renewable– Highest ratio in OECD, most likely in the world

• Oil still needed for 1/3 of the energy demand– About half to operate the fishing fleet– Other half mostly for our (large) car fleet

• We “cleaned up” prior to Kyoto– Fossil fuels eliminated from space heating– Therefore problems with Kyoto!

• Power sector still in public hands, no market reform yet!– Reform bill in preparation


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Potential Electricity Use in/from Iceland

• More power intensive industry– Aluminium smelters etc

– Problems with Kyoto due to CO2 from the process • Although a smelter in Iceland causes only 10%-20% of the

greenhouse gasses of a fossil fuel generated smelter

• Direct export via submarine cable– Export of “raw material”

– Hardly economically viable

• Production of artificial fuels (hydrogen)– Not economic yet


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70°

Bergen

Greenland

Edinburgh

Reykjavík

ReydarfjörðurIceland

Orkney

Germany

60°

50°

1170 km

2000 km760 km

1250 km

Shetland

Faroe Islands

Scotland

Norway

Denmark

Sweden

NetherlandsEngland

Grain

Ireland

20° 0°10° 20°

Submarine Cable

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Energy Policy of the Government

• Harnish the resources whenever possible– Foreign investment in power intensive industry

– Keep watch on developments in the hydrogen field

– Look after the environment

• Market reform in the electricity industry in year 2002-2004– Implementation of the EU electricity directive

– Full opening of the market


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Export of Energy Expertize


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UNU Geothermal Training Programme

Operated in Iceland since 1979.

Aims at assisting developing countries with significant geothermal potential to build up, or strengthen, groups of specialists covering most aspects of geothermal exploration and development

Offers annually six-month specialized courses for professionals in geothermal work.

Is hosted at Orkustofnun, with majority of instructors from the GeoScience Division.

Director: Dr. Ingvar B. Fridleifsson


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The UNU Fellows


In its first 22 years 245 scientists

and engineers from 36 countries

have attended the full programme.

Close to 50 Chinese fellows have

attended.

The class of 2001 includes 16

fellows from 10 countries.

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Icelandic Activities Abroad• Americas

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

• Asia– P. R. of China (Tanggu,

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


• Africa– Burundi– Cape Verde– Djibouti– Kenya– Uganda

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

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Type of Activities Undertaken Abroad


o Pre-feasibility studieso Feasibility studieso Training courseso Geothermal resource

surveyingo Geophysical and

geological explorationo Geochemical studieso Drilling supervisiono Well logging

o Well testingo Geothermal assessmento Production technology

consultingo Environmental studieso Reservoir monitoringo Reservoir modellingo Geoscientific consultingo Ad hoc services

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ORKUSTOFNUN Rannsóknasvið

Geothermal Export Potential Forecast

• Geothermal projects in California

• Ormat - additional work, e.g. in Kenya and Ecuador.

• CFG - Possible new power plant in Guadeloupe, drilling on Martinique and Santa Lucia

• Shortlisted for Reunion Island• Two heating projects in China• Heating projects in Turkey• Power, heating and desalination

projects Northern Greece and Greek islands

Some Foreign Project Clients in the Last Decade


• CFG; France

• Ormat; Israel and USA

• Galantaterm; Slovakia

• AGA-Ecuador

• IGME; Greece

• CMC Ltd, China

• Kenya Power Company Ltd

• EBRD, London

• INA Naftapin, Croatia

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Track record of geothermal as RESin Europe

• 28% of the total installed power in the four RES types is geothermal.

• It is 63% of the annual RES energy production in Europe.

According to WEC 1995According to WEC 19950

500

1000

1500

2000

2500

3000

3500

4000

Installed MWe Energy GWh/y

Geothermal

Wind

Solar

Tidal

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Track record of geothermal as RES world-wide

• Geothermal is 61% of the total installed power the four RES types.

• It is 86% of the annual RES energy production in Europe.

According to WEC 1995According to WEC 1995

0

5.000

10.000

15.000

20.000

25.000

30.000

35.000

40.000

Installed MW Energy GWh/y

Geothermal

Wind

Solar

Tidal


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International Geothermal Market Needs


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• National energy development planNational energy development plan• Pre-finance studies and finance solicitationPre-finance studies and finance solicitation• Pre-construction servicesPre-construction services• Project management, procurement servicesProject management, procurement services• Low costLow cost//soft financingsoft financing,, BOO or BOT arrangement BOO or BOT arrangement • Training at the scientific and engineering levelTraining at the scientific and engineering level• Operator training and post-operational servicesOperator training and post-operational services• Reservoir monitoring and simulation servicesReservoir monitoring and simulation services

All seven of Iceland’s strongest energy and power All seven of Iceland’s strongest energy and power entities propose to provide this through the entities propose to provide this through the

establishment of the new dynamic company Enex hfestablishment of the new dynamic company Enex hf

Enex hf


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• was established in the year 2000• By entities that collectively have several decades of

experience spanning a wide range of application and conditions, in the development of geothermal energy.

• The owner group, members of which pioneered comprehensive and integrated utilisation of geothermal energy, offers novel solutions applicable to geothermal resources of divers types and properties.

• It was established to co-ordinate ongoing efforts of the mother companies to export geothermal know-how and experience in a more vigorous and integrated manner than before.

Continue ...

Enex hf ... continued


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The objectives set out in The objectives set out in the company’sthe company’s charter are for example: charter are for example:

• Participation on commercial basis in studying, building and the subsequent operation of geothermal developments as a Joint Venture partner or part owner / operator

• To offer on purely commercial basis geoscientific and consulting services covering geothermal exploration and development, project financing, personnel training, sale and/or rental of tools and techniques specially developed and tested in Iceland

• Actively promote geothermal energy as a sustainable and clean alternative resource through visits, exhibitions and training seminars

Continue ...

Enex hf ... Owner companies


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1. Hitaveita Suðurnesja (Sudurnes Regional Heating Corp.): Established in 1974 is the world pioneer in integrated multi-utilisation of geothermal resources.

2. Jarðboranir hf (Iceland Drilling Company Ltd): Has been involved in geothermal drilling since 1930 and has drilled some 6000 km of high and low temperature wells in Iceland. It has moreover drilled high temperature geothermal wells and fresh water wells on the Azores and a number of de-watering wells in Ireland

3. Landsvirkjun (National Power Company): Is Iceland’s largest power company generating electric energy from hydro and geothermal. Established in 1965 it has a combined capacity of 1.122 MWe, which constitutes about 90% of the country’s gross capacity

• Norðurorka (Akureyri Municipal Water and Power Company): Is in the forefront of low temperature geothermal development.

Continue ...

Enex hf ... Owner companies


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• Nýsköpunarsjóður (New Business Venture Fund): Is a state fund set up to encourage and assist Icelandic firms in innovative business activities through equity funding of companies established for the purpose.

• Orkuveita Reykjavíkur (Reykjavik Energy): Has since 1930 operated the largest and most modern geothermal district heating system in the world. Owns and operates Iceland’s largest geothermal combined heat and power (CPH) plant (90 MWe).

• Virkir Engineering Group hf and Orkustofnun (National Energy Authority): The Virkir group established in 1969 confines its activities to geothermal consulting outside of Iceland. Orkustofnun is a state owned energy research, auditing and management organisation. Established some 70 years ago it has been involved in Icelandic geothermal exploration and development from the word go.

Documents

Energy in Iceland Export opportunities Thorkell Helgason, Ph.D. Director General ORKUSTOFNUN National Energy Authority of Iceland ÞH 15.08.2001