Landsvirkjun Restrictions to Last Longer than Expected

Landsvirkjun, the National Power Company of Iceland, has had to restrict power supplied to industrial production companies to a greater degree than expected, RÚV reports.

Though the power company often reduces its production in the winter, poor reservoir conditions have led to a greater than usual reduction in service. The reductions could have an impact in the hundreds of millions of ISK.

Nearly 10% of power

The reduction began shortly before the new year, and now amounts to around 10% of power delivered to industrial production companies.

In a statement to RÚV, Director of Management Valur Ægisson stated that the ongoing restrictions can be chalked up to poor water flow, as water levels in reservoirs have dropped rapidly. He cited that Blöndulón, a reservoir in North Iceland, has never been this low at this time of year.

The restrictions were initially applied to fish processing plants and data centres. However, restrictions were then also applied to industrial plants such as Elkem, Norðurál, and Rio Tinto.

Waiting for spring

Valur stated further to RÚV that the extent of the restriction amounts to tens of gigawatt-hours per month. The average monthly sales of Landsvirkjun are around 1250 gigawatt-hours.

The restrictions could result in considerable lost revenue for Landsvirkjun. “I can’t give an exact figure, but it measures in hundreds of millions,” stated Valur to RÚV.

Like much of the nation, the situation has the energy company waiting on the arrival of spring and the accompanying meltwater.  “That’s essentially what we’re waiting for, for warmer weather, rain, and see the snow melting in the highlands. When that happens, we can turn things around relatively quickly,” Valur stated.



Minister Alarmed by Plastic Pollution on Eldey Island

Eldey island, off the coast of the Reykjanes peninsula

A recent scientific expedition to the island of Eldey has revealed significant plastic pollution in gannet nests. The Minister of the Environment admitted that the images were shocking and stated there was reason to investigate the source of the plastic.

One of the world’s largest gannet colonies

Last weekend, a team of experts from the Icelandic Institute of Natural History, the University of Iceland, the Southwest Iceland Nature Research Centre, alongside wardens from the Environment Agency of Iceland embarked upon a scientific expedition to the island of Eldey.

Eldey is a small, uninhabited island 13 km off the southwest coast of Iceland’s Reykjanes Peninsula, covering 3 hectares and rising 77 metres above sea level. Notably, its sheer cliffs host one of the world’s largest northern gannet colonies, with approximately 16,000 pairs.

The purpose of the expedition was to measure the island´s erosion and height, assess gannet mortality following bird flu, and examine the extent of plastic pollution on the island.  

Nests primarily made from plastic

The expedition revealed that gannets have easy access to plastic, as their nests are mostly made from plastic debris. Hundreds of dead gannets were also observed by the experts, with it being estimated that three factors played a role in their deaths: natural attrition, bird flu, and plastic pollution.

“We knew it was bad, but this is very shocking. Almost all nests are made more or less out of plastic. So, this is terrible,” Sindri Gíslason, the head of the Southwest Iceland Nature Research Centre, told RÚV earlier this week.

“Striking” images

“The images were striking. This is the real upshot when we, or someone else, disposes of waste,” Guðlaugur Þór Þórðarson, Minister of the Environment, Energy, and Climate, stated in an interview with RÚV yesterday

As noted by RÚV, monitoring by the Environment Agency on Icelandic shores and the Marine Research Institute’s recordings of plastic have revealed that the largest source of plastic in the sea around Iceland comes from the fishing industry. 

Although the origin of the plastic on Eldey is not clear, the minister believes there is ample reason to investigate. “We are in a constant dialogue with the business community, and there is every reason to delve into this matter and analyse the origin of the plastic on Eldey,” Guðlaugur Þór observed.

Electricity Shortage “Unacceptable” Says Environment Minister

Low cost of electricity in Iceland compared with the rest of Europe

Icelandic fish processing plants will need to power their operations with oil and diesel generators for the third winter in a row due to an electricity shortage, Vísir reports. This burning of oil and diesel cancels out all of the emissions saved by electric cars in Iceland thus far. Minister for the Environment and Natural Resources Guðlaugur Þór Þórðarson says the lack of green energy is unacceptable in a country that’s aiming for a green energy exchange.

Guðlaugur Þór says that the current shortage is the result of very few power plant construction projects in Iceland over the past 15-20 years. “This is not acceptable at all and we must do everything we can to resolve this as soon as possible,” he told reporters. The Minister criticised the red tape that delayed the approval of the construction of new power plant projects and called for streamlining the system.

Read More: 2021 Electricity Shortage Impacts Local Industry

Last June, the Environmental and Natural Resources Board of Appeal revoked the construction permit for the proposed Hvammsvirkjun hydropower plant in South Iceland, after the local council decided to review new information on the plant’s potential environmental impacts. The Board of Appeal emphasised that the National Energy Authority (Orkustofnun) had not followed the guidelines of the Water Council when preparing to issue a permit to the hydropower plant.

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.

Data centres use more electricity than Icelandic homes

There are also those who are sceptical of the need for additional power plants in Iceland, shifting the attention to energy-intensive industries that arguably contribute little to the country’s GDP. Snæbjörn Guðmundsson of the nature conservation organisation Náttúrugrið has expressed concern that the proposed Hvammsvirkjun hydropower plant would be used towards Bitcoin mining, a growing industry in Iceland. The National Power Company has stated that it would not build power plants for the express purpose of providing energy to Bitcoin mining companies.

Data centres (of which Bitcoin mining centres are a subcategory) in Iceland use 30% more energy than all Icelandic homes put together, and while the percentage of this energy that goes toward Bitcoin mining is not public knowledge, it could be as high as 90%.

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.

Bitcoin Mining a Growing “Waste of Energy” in Iceland

Neither Icelandic authorities nor data centres in Iceland will reveal how much energy is used to mine Bitcoin or other digital currencies in Iceland, Snæbjörn Guðmundsson of nature conservation organisation Náttúrugrið told Vísir. Data centres use 30% more energy in Iceland than all Icelandic homes put together, and while the percentage of this energy that goes toward Bitcoin mining is not public knowledge, it could be as high as 90%.

Iceland’s abundance of renewable energy and cheap power has had both data centres and Bitcoin mining operations flocking to the country in recent years to set up shop. Iceland’s cool climate is another benefit, as data centres produce a lot of heat that would require additional energy to cool if located in a warmer climate. Both politicians and environmental activists have questioned the benefit of Bitcoin and digital currency mining operations for the Icelandic nation as well as their impact on the environment.

New hydropower plant could be used to mine Bitcoin

A 2018 report by KPMG stated that around 90% of energy used by data centres in Iceland had gone toward mining Bitcoin. In a column in Vísir, Snæbjörn refers to a recent analysis by Bitcoin expert Jaran Mellerud, who estimates that Bitcoin mining in Iceland uses around 120 MW of power, or around 85% of the 140 MW of power used by the country’s data centres in 2022. These figures have not changed much in recent years despite assertions from Iceland’s National Power Company (Landsvirkjun) that they would reduce the sale of Iceland’s energy to Bitcoin mining operations.

Snæbjörn is concerned that the proposed Hvammsvirkjun hydropower plant in South Iceland’s Þjórsá river would be used to power further Bitcoin mining in Iceland, although the National Power Company has stated that power plants would not be built solely for the energy needs of Bitcoing mining centres.

New York-based Bitcoin mining company told the Wall Street Journal last month that they would expand their operations in Iceland in response to an impending tax on Bitcoin mining in the United States. At the same time, Icelandic energy companies have stated there is no capacity for increased digital currency mining in the country.

“This is a waste of energy that should not be happening in a society like the one we live in today,” Snæbjörn stated.

Sale of Green Energy Credits from Iceland Suspended

AIB, the European company responsible for an energy certification system for power companies in the region, has suspended the sale of green energy credits from Iceland. According to a press release from the company, there are indications that a “double claiming of energy attributes was taking place.” The certificates are bought by foreign companies and are a huge source of income for Icelandic energy producers. RÚV reported first.

Last January, Iceland Review reported on the local impact of the energy credit market, which is intended to encourage investment in the production of green energy. While over 99% of energy produced in Iceland comes from renewable sources like hydroelectric and geothermal power, a majority of energy produced in Europe is still nuclear or fossil fuel. Some 90% of energy produced in Iceland is now sold on renewable energy credit markets, meaning consumers of non-renewable energy can purchase green energy credits even if their operations are powered by, for example, coal.

Sale of energy certificates could reach ISK 20 billion per year

AIB suspended the sales due to a suspicion of double counting: that some companies were claiming they had purchased green energy credits from Iceland that had already been sold to another party. AIB pointed to a lack of oversight on the sale of the certificates from Iceland, and that it needs to be better clarified who is responsible for the oversight.

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AIB stated that they intend to help Landsnet (the public company responsible for Iceland’s power transmission system) resolve the issue, “thereby securing Icelandic national interests.” The sale of such certificates nearly reached ISK 1 billion [$7.4 million, €6.7 million] in 2019. The National Power Company of Iceland (Landsvirkjun) estimates that sales could reach ISK 20 billion [$147 million, €133 million] annually.

What is Iceland’s target for biofuels as a share of motor fuels by 2030?

iceland green energy

A key aspect of Iceland’s energy transition is exploring the uses of renewable energy in transportation.

As can be seen from the graph below, electricity currently leads the way as the preferred renewable energy. Recent advances in the viability of private electric vehicles and Iceland’s plentiful geothermal and hydroelectric energy facilities have meant that, for Iceland, the future is mostly looking electric.

There are, however, efforts being made to investigate the viability of biofuel production in Iceland from industrial and household waste. Under a new recycling regulation, methane fuel will be also be produced from household waste.

Currently, road transport accounts for some 20% of GHG emissions in Iceland. Of this 20%, about 15% of GHG emissions come from freight vehicles. The National Energy Authority announced funding in May 2021 for heavy transportation projects. This funding will be used to purchase freight vehicles that use sustainable fuels or for infrastructure development that supports the use of renewable fuels for such vehicles. The National Energy Authority also announced project funding in May 2022 for heavy transportation, called “Electricity and Fuel Cells and Methane,” which includes both infrastructure and production. An Icelandic demonstration project for heavy transportation has also received funding from the Nordic Council of Ministers for Energy, which includes hydrogen refueling stations for freight vehicles.

Despite the overwhelming preference for electric energy, there is nevertheless significant growth in domestic production of renewable energy sources, including methanol production by CRI, and biodiesel production in waste management. Sorpa and Norðurorka produce biogas methane from landfill gas generated in the Reykjavik area and in Akureyri, which is used to fuel cars, buses, and waste disposal trucks.

However, despite the fact that biofuels will play a role in Iceland’s energy transition, because of the unique conditions of Icelandic energy production, it is not a priority and there are currently no set goals specifically for biofuel.

Read about the legal framework for Iceland’s energy transition at the National Energy Authority.

The most recent statistics on national energy consumption.

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.

State to Subsidise Rental EVs with ISK 1 Billion

Foreign Minister Guðlaugur Þór Þórðarsson.

In further efforts to meet its commitments to reduce CO2 emissions, the state will support car rental companies this year with some ISK 1 billion [$7.2 million, €6.7 million] in subsidies to accelerate the electrification of their fleets.

Minister of Environment, Energy, and Climate Guðlaugur Þór Þórðarson stated recently that Iceland’s tourism industry must also play a role in the energy transition. This includes not just the electrification of the rental fleet, but also an expansion of charging stations at hotels and guesthouses throughout the nation.

Iceland to Buy Emission Allowances to Meet Kyoto Commitments

The matter was discussed at a cabinet meeting last Friday, March 17.

Minister Guðlaugur stated: “We will be supporting the car rentals to acquire electric cars. This is extremely important in order for us to achieve the energy transition,  as car rentals are naturally a large part of the national car fleet. And if we are going to reach our goals for electric vehicles, then car rentals have to be included. And it’s by including the car rentals, that we will be able to reach our goals much sooner.”

Read more: Public Transport Funding

According to the Minister, the higher average cost of electric vehicles has until now been a barrier to these companies from buying more of them. The subsidies will be structured like the subsidies already available to individuals, which remove VAT up to a certain limit on EVs.

In his statement on the EV subsidies, the Minister also highlighted the lack of charging stations across Iceland as a bottleneck.

“It is likewise very important that hotels and guesthouses cooperate, for this to be a viable option […] And in order for us to prevent ‘charging anxiety’ and for this to be as efficient as possible, people must be able to charge at night,” Guðlaugur said.

Does Reykjavík Have Heated Sidewalks?

heated sidewalks reykjavík

When the city of Saskatoon wanted to invest in heated sidewalks in 2013, the CBC wrote: “Imagine a city with snow-free sidewalks all winter long without having to be plowed or shovelled. This isn’t a magical land — it’s Iceland, and the City of Saskatoon is looking towards it and a few other Scandinavian countries for inspiration.”

This may have led to a perception that most streets in Reykjavík, or even all of Iceland, are heated for snow removal. While this is not the case, many of Reykjavík’s busiest streets and sidewalks are, indeed, heated.

Iceland began installing these systems in the early 2000s. And while the energy cost might be prohibitive elsewhere, the availability of environmentally-friendly geothermal energy makes the system more or less environmentally neutral once it’s installed. Additionally, around two thirds of the heated water used in these systems is return water from space heaters. The water in space heaters in homes and businesses throughout Iceland averages 35°C [95°F], making it ideal for this task.

While many new outdoor parking lots feature such heating systems, there are still plenty of sidewalks throughout the capital region without these, as many travellers discovered this winter. 

In general, only new developments and the densest part of downtown are heated. Other municipalities throughout Iceland also have such systems, but the majority can be found in and around Reykavík. Of the 920,000 m2 total area covered by snow removal systems in 2008, 690,000 m2 was in the capital area.

Approximately one-third of these systems are in use in commercial areas, one-third by private homes, and one-third are installed in public areas.