Delay Issuing Permit for Hydropower Plant

A local council in South Iceland has postponed issuing a permit for the construction of a large hydropower plant on Þjórsá river to consider new information about the project’s potential environmental impacts, Vísir reports. The proposed Hvammsvirkjun hydropower plant would have an estimated capacity of around 95 MW and would create a lagoon with a surface area of 4 square kilometres [1.5 square miles].

Salmon fishermen and conservationists oppose power plant

The locality of Rangarþing ytra’s website states that a new message has been received from the Iceland’s North Atlantic Salmon Fund and the Fishing Association of Þjórsá river (Veiðifélag Þjórsár) calling on the local government to reject the National Power Company of Iceland’s request for a construction permit for the plant. “It was suggested that the matter be postponed until the next extraordinary meeting of the local council to give the locality’s environmental committee the opportunity to discuss the matter, given that new information regarding certain environmental aspects has been received,” the meeting minutes state.

One other local council is required to sign off on the hydropower plant’s construction permit, the council of Skeiðahreppur and Gnúpverjahreppur, and head of the local council Haraldur Þór Jónsson told reports the permit would be processed despite the delay in Rangarþing ytra. The National Power Company applied to the two localities for a construction permit for the plant last December after the project was approved by the National Energy Authority of Iceland.

Energy-intensive industries are largest consumers

The Hvammsvirkjun plant would have an estimated capacity of 95 MW. For comparison, Iceland’s largest hydropower plants are the Kárahnjúkar and Búrfell plants, with respective capacities of 690 KW and 270 KW. Both were built to provide power to aluminium smelters. Hellisheiði Power Station is Iceland’s largest geothermal power plant, with a capacity of 303 MW.

Snæbjörn Guðmundsson of nature conservation organisation Náttúrugrið has expressed concern that the proposed Hvammsvirkjun hydropower plant would be used towards Bitcoin mining, a growing industry in Iceland that is energy-intensive but contributes relatively little to the country’s GDP. The National Power Company has stated that it would not build power plants for the express purpose of providing energy to Bitcoin mining companies.

What is Iceland’s Energy Mix?

green energy iceland

Of all stationary energy produced in Iceland, some 70% is hydroelectric and 30% is geothermal, with a negligible but growing percentage of wind power, at .03%. Fossil fuels accounted for .01% of all energy produced in Iceland in 2021.

Iceland has become well-known for its ability to produce green energy relatively cheaply and efficiently. However, this picture has grown somewhat more complicated in recent years with Iceland’s participation in the international carbon credit market.

Read more: Iceland to Buy Emission Allowances

In figures recently released by the National Energy Authority on 2021 energy usage in Iceland, it has come to light that 63% of energy used in Iceland was produced by fossil fuel, 24% by nuclear power, and only 13% by renewable energy sources. Although the actual electricity flowing into Icelandic homes and businesses is still green, the energy credit market allows foreign companies to “buy” Icelandic green energy. In this way, consumers in Europe might choose to buy green certificates of origin for their energy, even though the energy actually powering their house is sourced from a coal plant.

This market dynamic has led to a curious situation: although the electricity flowing into Icelandic homes and businesses is 100% renewable in origin, Icelandic consumers are now being made to pay extra for green energy certification. Some 90% of energy produced in Iceland is now sold on renewable energy credit markets.

For those interested in Iceland’s energy production, you may want to read more at the National Energy Authority of Iceland.

More Energy Needed to Ensure Green Transition, Government Report Indicates

Krafla Mývatnssveit power plant electricity

Iceland will have to increase energy production by 125% in order to achieve a full transition to green energy, a new government report indicates. Iceland’s Environment Minister says the report can be used as a basis for decision making, but it is up to authorities how they apply the information provided. The CEO of the Icelandic Environment Association has stated that building additional power plants entails sacrificing Icelandic nature and is not a necessary step toward achieving the country’s environmental goals.

“It’s clear that this is necessary if we are to achieve the energy transition, Iceland’s Minister of the Environment, Energy, and Climate, Guðlaugur Þór Guðluagsson, stated. “However, there are many ways to achieve that goal. And this is not a policy. It is, however, a status report and highlights how things stand. Now it is up to the Parliament and the government to work it out, how to best handle this issue.”

Innovation depends on energy availability

The report proposes six scenarios for the future of energy production in Iceland, five of which entail increasing energy production. Only four scenarios assume that the country will achieve a full energy transition by 2040: that is, completely stop the use of fossil fuels within the next 18 years. If this goal is taken into account, and a rise in energy-intensive industry is assumed, then Iceland will need to produce 125% more energy than it does today. Ensuring those energy needs are met would not only require additional power plants, but increased efficiency at existing plants, energy-saving measures, and more efficient energy usage.

Read More: Iceland’s Plan to Become Carbon Neutral by 2040

Energy production is also a key factor in innovation and job creation across Iceland, according to Sigríður Mogensen, a department head at the Federation of Icelandic Industries, and one of the authors of the government report. “Many projects have been in the works and in development, whether it is food production projects, biotechnology projects, algae cultivation, and I could go on, which have unfortunately not been possible due to a lack of electricity or the weak state of the electricity transmission system.”

Entails sacrificing Icelandic nature

“It’s a question of what decisions we make. If this becomes a reality, then we’re making the decision to sacrifice Icelandic nature,” Auður Önnu Magnúsdóttir, CEO of the Icelandic Environment Association, stated in response to the report. She does not agree that a 125% hike in energy production is necessary in order to achieve a full energy transition.

Auður has argued for “real energy-saving measures, such as diversifying tourism, coastal shipping, such as building passive buildings, using heat pumps, and taking real energy efficiency measures, such as using waste heat from power plants. Today, 80% of the energy that is produced, it goes directly to big industry. That is not sensible prioritising.”