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Posts from the ‘Engineering and Technology’ Category

Icelandic Energy Summit, London, November 1st 2013

The British Icelandic Chamber of Commerce is introducing the Icelandic Energy Summit, hosted by Bloomberg, in London on Friday, 1 November 2013.

Iceland-Europe-mapAccording to the website of the British Icelandic Chamber of Commerce the event “will provide participants an insight into Iceland´s renewable energy resources, the birth and growth of the data storage industry in the country, the search for offshore oil – and what all this means for the country and its neighbours. The BICC is proud to have assembled some of the most dynamic voices in the developing story of Iceland and its energy potential.” The event, which is free, is said to be of interest “to finance professionals who conduct business with Iceland, or would like to, renewable energy specialists, academics and all those who take an interest in the future development of the Arctic. Feel free to pass on this invitation to colleagues, but  we expect this event to be well attended.”

The Agenda is as following:

10:30 Registration & Coffee
11:00 Welcome
William Symington, BICC
Keynote speech
Olafur Ragnar Grimsson, President of Iceland
11:45 UK-Iceland Interconnector
Charles Hendry, MP
Hörður Arnason, CEO Landsvirkjun
Paul Johnson, National Grid
Mike Lawn, Bloomberg New Energy Finance
13:00 Buffet Lunch
13:45 Data Centres in Iceland
Verne Global – Isaac Kato, CFO
Risk Management Solutions Inc, Robert Muir-Woood, Chief Research Officer
14:45 Geothermal
Sigurður St Arnalds, Senior Energy Advisor, Mannvit
Mark Taylor, Bloomberg New Energy Finance
15:45 Icelandic Oil exploration and the development of Arctic Resources
Michael Evans, Chief Operating Officer, Iceland Petroleum
Heiðar Guðjónsson, author “The Push for the Arctic”
16:30 Closing & Drinks

Here is a link to the registration.

Premature story in the Guardian

Yesterday, the Guardian published a story about Iceland seeking UK funding for subsea cable project. This is a somewhat premature statement by the Guardian. It is certainly true that the possibility of an electric cable between Iceland and the UK is being considered. However, no formal decision on such a project has been taken yet.


The Guardian correctly states that such a project could possibly deliver 5 TWh’s of green electrity a year to Britain. And the price of the electricity could be very competitive (lower than from British offshore wind farms). It is also correct that all the electricity from Iceland would be generated by harnessing renewable natural sources (especially hydropower, but also geothermal and wind).

The project would most likely strongly appeal to the UK. The Guardian correctly points out that the highly reliable potential energy in Iceland’s hydro dams can be seen as neatly dovetailing with Britain’s expanding, but unpredictable, wind power generation:

“As wind has become an increasing component of UK electricity generation, those tasked with matching UK supply with demand are increasingly facing a difficulty when usage spikes at times of when wind speeds drop. Few sources of generation, other than hydropower, can be brought on-stream at short notice to cover for lulls in wind.”

According to the Guardian, Iceland’s president Mr. Ólafur Ragnar Grímsson is expected this week to call on the British government to provide financial support for the construction of the subsea electricity cable – which will be the longest in the world – linking the electricity grid’s of Iceland and the UK.  Actually, it is more likely that the president will urge the British government to further cooperate with Iceland in necessary research and development that will be necessary if the cable is to be realized.

HVDC-Cable-Iceland-Europe-map-slideAs mentioned in the Guardian’s article, the governments of Iceland and the UK have already stared exploring proposals for a cable, after a ministerial meeting in May last year (2012). It would be a sensible step to strengthen the cooperation between the two countries in preparing to link the countries with an electric cable. Hopefully, the necessary cost analysis and research on for example the sea-bed can take place soon. When this will be finished, the financing of the cable may become a relevant issue.

NB: The Guardian says that the length of the cable would be 10,000 km. This is of course wrong; an electric cable between Iceland and the UK would be close to 1,200 km (somewhere between 1,000 and 1,500 km). The Guardian also says that the electricity industry in Iceland produces 12 GWh of electricity annually. The correct number is of course much higher or close to 17.2 TWh (17,200 GWh). Hopefully, the Guardian will correct their numbers. More information about the Icelandic power sector can be found here.

Exciting times in the Arctic

Iceland has issued two licenses for oil exploration on its continental shelf and is finalizing a third license. This may lead to massive investment, with relevant projects in Iceland regarding infrastructure and services necessary for the oil industry.


Melting ice is not only making the Arctic more accessible to oil exploration and drilling, but also to shipping through the Arctic Seas. Due to less ice, the Arctic Seas may soon become more navigable in increasingly long periods of the year. This may both apply to the Northeast Passage (off the northern coast of Russia and Norway; sometimes called the Northern Sea Route) and the Middle Passage (straight over the North Pole; sometimes called the Arctic Passage). The third arctic route is the Northwest Passage (north of Canada).

Navigable shipping routes through the Arctic  would be an attractive option for shipping companies, saving them weeks off voyages between Europe and Asia. For example, the Northeast Passage reduces the route from China to Northwestern Europe from approx. 11,000 nautical miles to just 6,500 nautical miles.

Icelandic companies and governmental agencies are closely following the possible increase in arctic shipping. And thinning ice has lead to high interest from foreign countries and companies regarding the construction of transshipment port at the Icelandic coast. This is no surprise, having in mind that the possibility of using the Northeast Passage as a viable alternative to the more and much longer conventional routes (such as through the Suez Canal).

Arctic-Northern-Sea-Route-Northeast-Passage-MapAlthough the Northeast Passage is faced with many obstacles (natural, political and technological) and will probably only be a minor seasonal route for years to come, this is an interesting and a real opportunity. Within a few decades the Northeast Passage may become not only an important sea-route, but even a major year-round transit operation. Wether Icelandic harbors will be an important part of this development is to early to say.

Significant milestone reached on HVDC cable

Connecting with another electricity market in Europe could provide Iceland with a unique opportunity to maximise the return from the country’s natural resources:

  • Surplus energy already within the system and presently unutilised by industry could be sold.
  • Further energy generation methods could be introduced.
  • The flexibility of hydropower could be better utilized.
  • Risk distribution could be increased.
  • Iceland’s energy supply security could be increased by opening up the presently isolated system.
  • A number of new and exciting employment opportunities could become a reality and the value created by such a project could be significant.

Iceland-Europe-HVDC-cable-map-LandsvirkjunEarlier this summer an advisory group on a subsea HVDC electricity cable between Iceland and Europe handed over its recommendations to the Icelandic Minister of Industries and Innovation. The report shows that there are indications that such a HVDC cable between Iceland and the United Kingdom could prove macro-economically profitable if certain conditions were to be fulfilled; i.e. if negotiations with the counterparties should prove successful, procuring favourable energy prices and secure long term contracts.

The recommendations of the advisory group are a significant milestone in assessing the feasibility of connecting Iceland with the European electricity market. The advisory group was unanimous in its opinion that work should continue on mapping out the various aspects of the project domestically whilst concurrently seeking out answers on potential operational and ownership models from the counterparties in the UK.

The risk of domestic electricity prices multiplying, with a connection with European markets, seems to be minimal. The Norwegians have set a successful precedent for achieving the consensus of stakeholders whilst utilising the opportunity to sell electricity to the European market. This has been done without threatening the existence of industry within Norway.

Iceland-Landsvirkjun-Sigalda-HydroThe Minister of Industries and Innovation will assess the recommendations of the advisory group and come to a decision as to the next step. It is estimated that the preliminary findings will be released by the end of this year (2013). This will include a decision on if and when expensive and extensive detailed research on the project will begin.

Verne Global in Iceland scores high

Iceland’s green data centers are receiving growing interest. They run 100% on renewable energy and offer the lowest carbon footprint in the industry.


It does indeed matter if a data center is green or not. According to a report by UBM Tech and InformationWeek, 22 percent of 100 executives said they regularly track energy usage in their data centers, and close to 60 percent of IT decision makers say the state of their data center is fair, serious or urgent, and at the brink of running out of capacity in 2014. For many of those executives and IT people, Iceland may be the perfect location for their data.

Small and large companies alike are looking for greener options. Adobe, eBay, Facebook, Hewlett-Packard, Salesforce and Symantec have joined the Future of Internet Power initiative to showcase low-carbon power. IBM is heavily into promoting green data center design; the European Union Commission honored 27 of them in January 2012. EBay also has raised the bar by with its Digital Service Efficiency (DSE) methodology, which links how many “buy” or “sell” business transactions are completed per kilowatt-hour.

Recently, the GreenBizGroup listed 12 green data centers and co-location facilities that stand out for innovative cooling, green energy or head-turning designs. One of them is the data centre of Verne Global in Iceland. According to GreenBiz, the geothermal and hydroelectric-powered campus of Verne Global in Southwest Iceland calls itself the first zero-carbon data center. Among its customers are automaker BMW Group and the Climate Action organization.

Krafla_geothermal_power_station_winter_LandsvirkjunBMW is using the campus of Verne Global for crash simulations, aerodynamic calculations and other computer-aided design (CAD) purposes. This requires plenty of electricity, both for the transactions and to keep the infrastructure cool. By moving ten of its  high-performance computing clusters (HPC) to Iceland from Germany, BMW hopes to reduce annual carbon emissions by 3,570 metric tons.

What is no less interesting for BMW and other companies considering where to host their data, Iceland not only offers green electricity and natural cooling, but also electricity prices that are lower than anywhere else in Europe. Therefore, it is quite obvious that Iceland has excellent possibilities for becoming a leading data centre hub.

Green methanol produced in Iceland

In Iceland renewable geothermal energy is utilized to produce Green Renewable Methanol; a synthetic liquid fuel which can be used as a fuel blend for normal gasoline combustion engines. The company behind this innovation is Carbon Recycling International (CRI).

Methanol-CRI-process-explainedMethanol is one type of alcohol fuel that can be used as alternative fuel in gasoline combustion engines, either directly or in combination with gasoline. If it is used as low blend in gasoline, very little or even no modifications of the engine are needed.

Methanol is produced from hydrogen and carbon monoxide. Normally the feedstock is petroleum based, such as natural gas or coal. However, it is possible to obtain the hydrogen portion of the synthesis gas via electrolysis, as well as the carbon monoxide by collecting it from a a biomass, factory emissions or a geothermal borehole.

The Green Renewable Methanol produced by CRI is made from water and carbon dioxide from a geothermal power plant. The electricity used in the process comes from the same geothermal power plant (the Svartsengi Geothermal Plant in Southwest Iceland). One might wonder why power from geothermal power plants in Iceland is categorized as renewable energy, since they emit carbon dioxide. The fact is that the amount is tiny compared to fossil fuel tendencies – yet enough for CRI to utilize it for methanol production. And CRI refers to its product as Green Renewable Methanol because it captures carbon dioxide that would otherwise escape to the atmosphere.

Methanol-CRI-George Olah-plant-Svartsengi

The methanol from CRI’s plant is blended with regular gasoline to meet the fuel standards of the European Union (EU). According to the European regulations, the maximum volume of methanol in the gasoline can be three percent). In the world about 20 million tons (25 billion liters) of methanol are consumed as fuel annually. However, only a fraction of it is from renewable sources.

It is expected that the market for renewable automobile fuels in Europe will more than double before 2020. Large share of that will be in the form biofuels from food sources. The market for renewable transport fuels which are of non-biological origin or from waste is expected to show the fastest growth in coming years. CRI may be in a unique position having brought a renewable fuel to the market from non-biological sources (as opposed to oil seeds, corn or sugar cane). The Green Renewable Methanol proves that carbon dioxide can provide alternative renewable fuel and it is not necessary to use scarce agricultural resources or destroy forests and wetlands to grow fuel crops. And, unlike hydrogen, methanol can be transported and distributed via existing gasoline infrastructure.

argos-energiesEarlier this year (2013), CRI announced that the first shipment of renewable transport fuel from its production plant in Iceland had been shipped to Dutch oil company Argos in Rotterdam, signaling the entrance of transport fuel from geothermal sources to the European market. Argos is the largest independent player in the downstream oil market in Western Europe and distributes over 17.5 billion liters of fuels each year. The company has a leading position in the Netherlands and also operates a distribution network in Belgium, France, Germany and Switzerland. Argos has been ambitious in providing renewable fuel and it will be interesting to see how the Green Renewable Methanol from Iceland will fit into their fuel mix.

The GEOthermal Research Group

The cooperative project Deep Roots of Geothermal Systems (DRG) aims at understanding the relationship of water and magma in the roots of volcanoes and how heat is transferred into geothermal systems to maintain their energy. Furthermore, the project focuses on the design of wells and well heads for high temperatures, as well as methods for utilizing superheated steam from greater depths.

PrintThe project is managed within a cluster cooperation called GEORG. This Icelandic entity is financially supported by the National Energy Authority (Orkustofnun), Icelandic power companies Landsvirkjun, Orkuveita Reykjavíkur (Reykjavik Energy), and HS Orka, and the Iceland Deep Drilling Project (IDDP). The IDDP has several partners from Europe and USA, making both IDDP and GEPRG leading international players in geothermal research.

By enhancing research and development of geothermal resources in a sustainable way, geothermal energy will constitute an important part of reducing the world dependence on carbon-based energy sources.  Hence, the foundation of GEORG can be vital. It is based on the principles of creating a critical mass of joint resources and efforts to break through existing scientific and technical barriers to innovation in the field. This may lead to increasing the number of qualified experts in geothermal research, engineering, design and technical exploitation of the resource.

OR-Hellisheidi-Power-Plant-SteamThe research within GEORG is performed by three groups made up of representatives from universities, research institutes, engineering companies and energy companies. The latest technology is be applied in surveying, resistance measurements and seismic measurements, petrology and geochemistry. In addition, new simulation models will be developed. These models will be used to simulate heat transfer and operation of geothermal boreholes for high temperature steam. Training young scientists to work in this field will be an area of heavy focus for this project.

The project will be ongoing over the next three years and the partners have pledged direct financial support amounting close to 100 million ISK. In addition, they will provide support through other similar projects the partners are working on. More information about geothermal energy in Iceland can be found here.

Landsvirkjun promotes university research and education

The Icelandic power company LandsvirkjunReykjavík University (RU), and the University of Iceland have joined forces to support and encourage the development of expertise within the field of renewable energy. The cooperation will strive to create a source of shared value for Landsvirkjun, the universities and Icelandic society by supporting those disciplines where more education and research are vital.

Landsvirkjun-university-cooperation-2013In total, Landsvirkjun has pledged 80 million ISK to the universities over a five year period, to promote education and research in geochemistry, electric power engineering and other academic disciplines within the universities. The cooperation agreement with the University of Iceland has the main objective of promoting and supporting teaching and research in the disciplines of geochemistry, geology, mechanical and industrial engineering. An emphasis will be placed on developing expertise in the field of renewable energy sources. Landsvirkjun and Reykjavík University will also cooperate in promoting research and university education in the field of renewable energy.

Hordur-Arnarson-Landsvirkjun-CEO-presentingWhen signing the Agreement Mr. Hörður Arnarson, CEO of Landsvirkjun, stated that in building a dynamic cooperation between Landsvirkjun and the universities will create shared value for the economy and for society, by sharing expertise and supporting innovation and development in renewable energy sources. The University of Iceland has a long established history in building upon its expertise in these fields and the contract is an extension of decades of cooperation between the university and Landsvirkjun in the disciplines of engineering and the natural sciences. In recent years the Reykjavik University has also been actively developing dynamic courses and expertise in technical subjects, including the utilisation and distribution of renewable energy sources. The financial support from Landsvirkjun will substantially strengthen education, research and the development of projects related to renewable energy within the universities, and increase opportunities for expertise and creativity.

China and Iceland strengthen geothermal cooperation

Iceland has signed a free trade agreement with China, becoming the first European country to do so.

Iceland-China-Free-Trade-Agreement-april-2013-2Iceland’s Foreign Minister Össur Skarphéðinsson signed the deal with China’s Commerce Minister Gao Hucheng in Beijing couple of days ago, bringing to a close six years of talks. The free trade agreement will lower tariffs on a range of goods and is expected to boost seafood and other exports from Iceland to the world’s second-largest economy.

During talks following a formal welcoming ceremony at the Great Hall of the People in the center of Beijing, Chinese Premier Li Keqiang said the free trade agreement was “a major event in China-Iceland relations”. He added that the agreement will “increase the soundness of business transactions and presumably the interest among Chinese and Icelandic companies that are cooperating in geothermal power”.

China is already benefiting from Iceland’s expertise after 80 Chinese students graduated from the United Nations University Geothermal Program in Reykjavik. The signature of the free trade agreement between China and Iceland comes only a year after the countries signed a special deal  to increase co-operation in the development of geothermal energy. 

When in Iceland in April 2012, China’s then-Premier Wen Jiabao concluded the agreement during the first stage of a four-nation European tour.

China-Geothermal-AreaIceland is on the forefront in geothermal energy utilization and is going to work with China, the world’s largest energy consumer, to develop geothermal resources. In an effort to meet an exponentially growing energy demand, as well as reduce its greenhouse gas emissions, China has become a leading investor in alternative energy technologies. China Petroleum & Chemical Corporation (Sinopec), the second largest oil and gas producer in the country, plans to make geothermal energy one of its main businesses.

The geothermal strategic partnership with China offers Iceland serious economic potential. Iceland is already working with India, countries in East Africa, Abu Dhabi, and several western countries to develop geothermal power projects. Geothermal energy resources are widely discovered in China, making the country riche in geothermal energy. The country is still in its infancy of developing and utilizing these natural resources, thus offering a huge market potential.

European Union welcomes Icelandic geothermal know-how

Earlier this month the Energy Commissioner of the European Union (EU), Mr. Günther Oettinger, emphasized the importance of Icelandic geothermal experience and know-how for EU’s energy policy.

oettinger-geothermal-energy-eu-policyIn his closing speech at the Iceland Geothermal Conference 2013 in Reykjavik, Mr. Oettinger backed binding targets for renewable energy for 2030, noting that geothermal energy can “help us reach our energy and climate goals, and that we can expect the utilization of geothermal energy  to become more and more prominent”.

In European context, geothermal is currently just slightly over 0.1% of the total electricity generation. Around 1% of the renewable power generation within the EU comes from geothermal and geothermal accounts for approxemately 3% of EU’s renewable heat production.

Mr. Oettinger pointed out that the EU can learn a lot from Iceland regarding utilization of geothermal energy. Iceland alone generates almost as much electricity from geothermal sources as the rest of the EU put together. While all the 27 member states of the EU produce close to 6 TWh of electricity from geothermal sources annually, the figure in Iceland is 4,7 TWh. Another comparison Mr. Oettinger mentioned in his speech, is that Iceland produces more than ten times as much geothermal heating as Germany.

With this said, Mr. Oettinger expressed that it is “no surprise that the United Nations decided in 1978 to base its University Geothermal Training Programme in Iceland”. He went on stressing that Iceland has shown that by getting the energy policy and prices right, the jobs and businesses will follow.

Iceland-Geothermal-Station-PipesMr. Oettinger said that geothermal can help EU’s member states achieving their energy policy goals on sustainability, competitiveness, security of supply, and geopolitical security. Of course geothermal will never be taking off in the EU the same way as in Iceland – the geography and geology is simply too different for that. “But we reckon that if we played it right, we could get 5% of our energy demand from geothermal within 10 years.”

This is a very interesting suggestion of a possible goal by Mr. Oettinger. Not only would this call for a massive investment in the geothermal sector, but at the same time offer great possibilities for Icelandic businesses, with their extensive knowledge of geothermal utilization. In this respect it is worth mentioning the Icelandic engineering firms are already is working on several geothermal projects on the European continent and elsewhere in the world.

Possibly, geothermal utilization for heating and cooling (by geothermal heat pumps) could be the best option for the EU in growing its use of geothermal energy. Thus, it is not surprising that in his speech Mr. Oettinger especially mentioned that although the EU does have “nowhere near the geothermal resources that Iceland has, there is plenty of potential in Europe, in particular for heating”. This may for example apply to countries like Germany, Hungary, Romania and Slovenia, just to name a few of EU’s member states.

Iceland-Geothermal-Conference-2013-Gekon-logoFrom Mr. Oettinger’s speech at the Iceland Geothermal Conference, it seems clear that we may expect more cooperation in the field of geothermal energy between the EU and Iceland. Mr. Oettinger expressed EU’s interest in increasing financial support for more geothermal research. In this regard he mentioned the European GEOFAR project (Geothermal Finance and Awareness in European Regions), and stressed his aim to get bankers and investors more interested, as well as conventional extractive industries, including oil and gas.

Next Iceland Geothermal Conference will be taking place in April 2016.

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