ENERGY IN ICELAND - Orkustofnun

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1 IntroductionDuring the past century, Icelandtransformed itself from an impoverishednation to a land of plenty.Harnessing domestic energy and theavailability of energy resources forindustrial and public consumptionplayed a major role in this development.It was, in fact, a preconditionfor economic development.Oddur SigurðssonA geothermal area near Hrafntinnusker in mid-Iceland.There were a number of stages alongthe way to prosperity, most notablythe mechanization of fisheries, andlater agriculture, and the developmentof a communications infrastructure.These advancements werefollowed by the development of generalutilities, electrification of townsand rural areas, and the creation ofgeothermal district heating services.Thanks to the latter, most Icelandersenjoy inexpensive heat from geothermalsources.Around the middle of the 20th century, efforts to utilize the country’s energy resourcesfor power intensive industry began. The largest single effort was the constructionof the Alusuisse aluminum plant, ISAL, (owned by Alcan since 2000) in Straumsvik,just south of Reykjavik, in 1969. The hydroelectric power was harnessed from a glacialriver in the Burfell power station. As the end of the 20th century approached, anew era dawned with the growth of Iceland’s power intensive industry. That growthcontinues today. Electricity production was 8.7 TWh in 2005 and is expected to in-
crease to approximately 14.6 TWh in 2008, a 70% rise. This increased production ismainly due to the needs of the aluminum industry. The annual aluminum productionwas 275 kilotons in 2005 but is estimated to increase to 726 kilotons in 2008.While the importation and distribution of fossil fuels in Iceland have always been in thehands of private enterprises, power production and the distribution of electricity andgeothermal energy have almost completely remained in the public domain, or beencarried out by publicly owned corporations. The entire organization and legal frameworksurrounding energy use was, until recently, built around this structure. In 2003, anew electricity act was adopted, introducing competition to the generation and sale ofelectricity. Furthermore, a new act regulating district heating is planned 2007.This booklet concentrates primarily on a general overview of Icelandic energy affairs,generation of energy and its utilization, commencing with a brief historical overview.
Page 1 and 2: ENERGY IN ICELANDHistorical Perspec
Page 3: ENERGY IN ICELANDHistorical Perspec
Page 6 and 7: CONTENTSForeword by the Minister of
Page 10 and 11: 2 Historical OVERVIEWof Energy Affa
Page 12 and 13: Oddur SigurðssonA hydropower stati
Page 14 and 15: 3 ENERGYRESOURCESEnergy reservesOdd
Page 16 and 17: Figure 3. Installed capacity of the
Page 18 and 19: 4 ENERGY usePrimary energy use inin
Page 20 and 21: Oddur SigurðssonHeated parking spa
Page 22 and 23: Helga BarðadóttirThe silica rich
Page 24 and 25: Oddur SigurðssonDuring the Christm
Page 26 and 27: In 1970, the first year that the IS
Page 28 and 29: Iceland New Energyof these gases, s
Page 30 and 31: 5 RegulatorystructureLegislation on
Page 32 and 33: Oddur SigurðssonThe Ferrosilicon p
Page 34 and 35: Energy agencyA step towards bringin
Page 36 and 37: 7 Lookingto the futurePolicy object
Page 38 and 39: which will take at least a decade t
Page 40: Figure 20. Map of Iceland.40

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