Energy in Iceland Export opportunities Thorkell Helgason, Ph.D. Director General

1. ORKUSTOFNUN National Energy Authority of Iceland Energy in IcelandExport opportunitiesThorkell Helgason, Ph.D.Director General ÞH 15.08.2001

2. ORKUSTOFNUN National Energy Authority of Iceland Energy Resources of Iceland and its utilization ÞH 15.08.2001

3. ORKUSTOFNUN National Energy Authority of Iceland Primary Energy Consumption in Iceland 1940-2000 ÞH 15.08.2001

4. Electricity consumption 1950-2000 ORKUSTOFNUN National Energy Authority of Iceland ÞH 15.08.2001

5. ORKUSTOFNUN National Energy Authority of Iceland ÞH 15.08.2001

6. ORKUSTOFNUN National Energy Authority of Iceland Origin of greenhouse gas emissions in 1999 ÞH 15.08.2001

7. ORKUSTOFNUN National Energy Authority of Iceland Energy Potential for Electr. Production (TWh/a) ÞH 15.08.2001

8. ORKUSTOFNUN National Energy Authority of Iceland Electricity production 1997 Hydroelectric capability Iceland 2000 ÞH 15.08.2001

9. ORKUSTOFNUN National Energy Authority of Iceland 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 ÞH 15.08.2001

10. ORKUSTOFNUN National Energy Authority of Iceland 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 ÞH 15.08.2001

11. ORKUSTOFNUN National Energy Authority of Iceland 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 ÞH 15.08.2001

12. ORKUSTOFNUN National Energy Authority of Iceland Submarine Cable 70° Greenland Reydarfjörður Iceland Reykjavík Sweden Faroe Islands Norway Bergen 1250 km 1170 km 60° Shetland Orkney 2000 km Scotland Denmark 760 km Edinburgh Ireland Germany England Netherlands Grain 50° 20° 10° 0° 20° ÞH 15.08.2001

13. ORKUSTOFNUN National Energy Authority of Iceland 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 ÞH 15.08.2001

14. ORKUSTOFNUN National Energy Authority of Iceland Export of Energy Expertize ÞH 15.08.2001

15. ORKUSTOFNUN National Energy Authority of Iceland 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 ÞH 15.08.2001

16. ORKUSTOFNUN National Energy Authority of Iceland 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. ÞH 15.08.2001

17. ORKUSTOFNUN National Energy Authority of Iceland Icelandic 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 • Russia • Philippines • Turkey ÞH 15.08.2001

18. ORKUSTOFNUN National Energy Authority of Iceland Type of Activities Undertaken Abroad • Pre-feasibility studies • Feasibility studies • Training courses • Geothermal resource surveying • Geophysical and geological exploration • Geochemical studies • Drilling supervision • Well logging • Well testing • Geothermal assessment • Production technology consulting • Environmental studies • Reservoir monitoring • Reservoir modelling • Geoscientific consulting • Ad hoc services ÞH 15.08.2001

19. 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 Rannsóknasvið ORKUSTOFNUN Geothermal Export Potential Forecast ÞH 15.08.2001

20. ORKUSTOFNUN National Energy Authority of Iceland SomeForeign 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 ÞH 15.08.2001

21. 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 1995 ORKUSTOFNUN National Energy Authority of Iceland Track record of geothermal as RESin Europe ÞH 15.08.2001

22. ORKUSTOFNUN National Energy Authority of Iceland 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 1995 ÞH 15.08.2001

23. ORKUSTOFNUN National Energy Authority of Iceland International Geothermal Market Needs • National energy development plan • Pre-finance studies and finance solicitation • Pre-construction services • Project management, procurement services • Low cost/soft financing,BOO or BOT arrangement • Training at the scientific and engineering level • Operator training and post-operational services • Reservoir monitoring and simulation services All seven of Iceland’s strongest energy and power entities propose to provide this through the establishment of the new dynamic company Enex hf ÞH 15.08.2001

24. ORKUSTOFNUN National Energy Authority of Iceland Enex hf • 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 wasestablished 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 ... ÞH 15.08.2001

25. ORKUSTOFNUN National Energy Authority of Iceland Enex hf ... continued The objectives set out in the company’s 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 ... ÞH 15.08.2001

26. ORKUSTOFNUN National Energy Authority of Iceland Enex hf ... Owner companies • Hitaveita Suðurnesja (Sudurnes Regional Heating Corp.): Established in 1974 is the world pioneer in integrated multi-utilisation of geothermal resources. • 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 • 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 ... ÞH 15.08.2001

27. ORKUSTOFNUN National Energy Authority of Iceland Enex hf ... Owner companies • 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 andOrkustofnun (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. ÞH 15.08.2001