

Iceland: High Penetration of Renewables in the Modern Era

Iceland's famous for its breathtaking scenery, its geysers, its Blue Lagoon — and for sitting astride the Mid-Atlantic Ridge. Among energy wonks, Iceland is also well known for using its abundant renewable energy, and especially for tapping the volcanic roots of the island in developing its geothermal resources.

Iceland today generates 100% of its electricity with renewables: 75% of that from large hydro and 25% from geothermal. Equally significant, Iceland provides 87% of its demand for hot water and heat with geothermal energy, primarily through an extensive district heating system.

Altogether, hydro and geothermal sources meet 81% of Iceland's primary energy requirements for electricity, heat, and transportation. This must be a record in the modern era. Certainly Icelandic politicians think so, because they frequently make reference to it.

What Icelandic politicians don't mention as often is that half of all the electricity the country produces is provided at low cost to aluminum smelters. And no, there's no bauxite in Iceland. The country uses the low cost of its renewably-generated electricity — and just as importantly the stable price it represents over the long term — to lure smelters to the island. Iceland profits from the value added by smelting the aluminum ore from other countries.

In the spring of 2011, my wife Nancy Nies and I passed through Iceland on our way to Europe. We chose to spend a few days in Reykjavik to see first hand what modern geothermal power plants and geothermal heating look like — and to take a plunge into that famous Blue Lagoon.


Despite its economic collapse in 2008, Iceland still has one of the world's highest standards of living.

As anyone who tried to fly to Europe in the spring of 2011 knows, the island of Iceland is geologically active — very active. The island is in the midst of an active spreading zone: half of the country lies on the North American tectonic plate, the other half lies on the Eurasian plate.


Until the extensive development of the island's hydro and geothermal resources, the country was dependent upon coal and oil for providing transportation, fueling its fishing fleet, and heating its homes. The latter is not something to take lightly in a nation just south of the Arctic Circle. Iceland's older residents can remember a time when coal smoke, not steam from the island's famed fumaroles, shrouded the capital.


Geothermal Development in Iceland

Travelers in transit through Iceland may know nothing about the country's geothermal resources, but as their flight arrives at the Keflavik the airport they may look askance at their seatmates. They might sniff the air and wrinkle their noses. But it's not the passengers that stink. It's Keflavik. And that rotten-egg smell is characteristic of geothermal areas around the world. The airport sits near the end of the Reykjanes peninsula, one of the geothermal fields serving the capital, an hour's drive southwest of Reykjavik.

You know you're in Iceland when you can see the steam plumes from fumaroles and vents along the road from the airport to Reykjavik.



Maybe because of their rugged Viking roots, Icelanders swim all year — outdoors as well as indoors — in heated pools, to be sure. They've taken their national pastime and the waste heat from one geothermal power plant and turned it into a tourist attraction.

Only minutes from the international airport at Keflavik is the Blue Lagoon, a posh spa built on the waste fluids from Svartsengi geothermal power plant. It's common for transit passengers to spend a few hours luxuriating at the Blue Lagoon before catching their next flight.




Formerly with the Icelandic Geologic Survey, Omar speaks English with a Scottish brogue from his years in Edinburgh pioneering the study of resistivity in rock for locating high-temperature geothermal resources. The silver-haired geologist could be a stand-in for Professor Lidenbrock in Jules Verne's Journey to the Center of the Earth. (Icelanders are quick to point out that Jules Verne's novel is eerily similar to an earlier Icelandic tale.)

On the drive to Reykjanesvirkjun — the Reykjanes power plant — at the end of peninsula jutting into the North Atlantic, Omar explained how within one generation, following the oil crises of the 1970s, Iceland moved almost completely from heating with fossil fuels to geothermal energy.



The area around the plant at Svartsengi, or "black meadow" in Icelandic, was open to the public. There were no chain-link fences. No guards. And at one fumarole field, there was an open boardwalk for tourists. With the exception of the wind, the cold, and the gray sky, you could imagine you were in Yellowstone National Park.

Fumarole field on the Reykjanes peninsula, Iceland.





The Blue Lagoon is one of Iceland's most famous tourist attractions.

What is most striking to an American visitor is the appearance of the plants — not just the interior but also the exterior. The interiors of most power plants today are spotless, even polished. Managers — and, more importantly, insurers — learned that if you can't keep the floor clean, you're not likely to do much of anything else right, ultimately endangering employees and expensive equipment.

Iceland's power plants go beyond spotless. They are works of art.

Iceland takes architecture seriously, and this is evident in the most utilitarian of structures: their power plants.

Both Svartsengi and the nearby Reykanes plant are stunning examples of modern industrial architecture. Rather than being a blot on the landscape, they are literally shining examples that Iceland takes renewable energy and its place in the landscape seriously. It's a lesson that power-plant developers should take to heart outside Iceland.

Architectural feature of the Svartsengi geothermal power plant, Iceland.





To this day the main shopping street of the capital, Laugavegur, remains the "road to the hot springs," and is now a part of the city and the site of a major swimming, sport, and hotel complex, including the Hilton Nordica.



Reykjavik has come a long way. In 1933 only 3% of the capital's population was served by a district heating system. Nearly everyone used coal to heat, and the sky was black as a result.



Einar proudly points to the near elimination of global warming gases in Iceland, noting that emissions of CO2 from electricity generation and heating are now only found in some off-gases from the city's newly developed high-temperature geothermal field.



Orkuveita Reykjavikur's stainless steel well enclosure in the Laugardalur district of Reykjavik.




Power House for Britain?

Iceland not only points to its success in meeting its own needs with renewables but also aggressively markets its renewable resources to energy-intensive industries. Now it wants to go even further — specifically, to the British Isles.

In an ambitious — some might say foolhardy — move, Iceland has injected itself into Britain's Electricity Market Reform debate by proposing an unprecedented 700 mile sub-sea cable to Scotland. The $2 billion project would carry 5 TWh of Iceland's renewable electricity to Britain's energy market reports Bloomberg. That's a third more electricity than produced in all of Iceland today and as much as all the currently developed geothermal on the island.


Whether such a project is technically feasible or economically viable remains to be seen. Iceland certainly has the untapped geothermal potential to do so. But it's an open questoin as to whether geothermal resources developed in Iceland and transmitted such a long distance would be cheaper than if Britain developed its own geothermal resources.

And if Britain launches its EMR as planned, what would be the "strike price" of Icelandic geothermal energy delivered to Britain? Would it be cheaper than new nuclear? Intriguing questions all.

Regardless of whether such a mega-project is feasible or whether Iceland's citizens would be willing to tolerate the financial risk of developing the project after all they've lost in the country's banking boondoggle, Iceland remains a model of what can be accomplished with renewable energy both in electricity generation — and equally as important in heating — when a nation puts its mind to it.


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Volume 18, Issue 3


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