Electricity sector in Iceland

Last updated

Much of electricity in Iceland is generated by hydroelectric power stations. Irafossstod was built in 1953 and is one of Iceland's oldest hydroelectric plants still operating, located just south of Thingvallavatn. Hydro Electric Power Station at Yrufoss - panoramio (1).jpg
Much of electricity in Iceland is generated by hydroelectric power stations. Írafossstöð was built in 1953 and is one of Iceland's oldest hydroelectric plants still operating, located just south of Þingvallavatn.

The electricity sector in Iceland is 99.98% reliant on renewable energy: hydro power, geothermal energy and wind energy. [1]

Contents

Iceland's consumption of electricity per capita was seven times higher than EU 15 average in 2008. The majority of the electricity is sold to industrial users, mainly aluminium smelters and producers of ferroalloy. The aluminum industry in Iceland used up to 70% of produced electricity in 2013. [2]

Landsvirkjun is the country's largest electricity producer. The largest local distribution companies are RARIK, Orkuveita Reykjavíkur and Hitaveita Suðurnesja. Electricity production increased significantly between 2005 and 2008 with the completion of Iceland's largest hydroelectric dam, Kárahnjúkar Hydropower Plant (690MW). [3] Iceland's national electrical grid is owned and run by Landsnet and is composed of 3,000 km of transmission lines and 70 or so substations.

Production and Consumption

Iceland's electricity is produced almost entirely from renewable energy sources: hydroelectric (70%) and geothermal (30%). [4] Less than 0.02% of electricity generated came from fossil fuels (in this case, fuel oil). [4] In 2013 a pilot wind power project was installed by Landsvirkjun, consisting of two 77m high turbines with an output of 1.8MW. [5]

There are plans to increase wind power share in Iceland, with many onshore and offshore wind farm opportunities. [6] According to Statistics Iceland the total electricity consumption was 7,958 GWh in 2002, 11,480 GWh in 2007, and 17,068 GWh in 2012. [7] Electricity production increased by 24 MWh/person from 2005 to 2008, an increase of 83%. [3]

Two remote islands disconnected from the Icelandic grid rely on diesel generators, Grímsey and Flatey.

Iceland electricity production by source Iceland electricity production.svg
Iceland electricity production by source
Installed Electrical Capacity and Production in Iceland (2020) [1]
SourceInstalled CapacityProduction
kW %MWh %
Hydroelectric 2,106,93471.77%13,156,97268.79%
Geothermal 755,04025.72%5,960,60231.16%
Wind 1,8000.06%6,6600.03%
Fuel 71,9712.45%3,0670.02%
Total2,935,745100%19,127,302100%

Transmission

220kV transmission lines in the vicinity of Reykjavik Six-Armed Giants (4296044242).jpg
220kV transmission lines in the vicinity of Reykjavík

The Icelandic Transmission System Operator (TSO) is Landsnet, a company jointly owned by three state-owned power companies: RARIK, Landsvirkjun and Orkubú Vestfjarða. The Icelandic TSO is compensated for all transmission costs by retail and wholesale distributors. [8] Landsnet's transmission network operates at voltages of 220kV, 132kV and a few 66kV lines and serves the whole country and is composed of 3,000 km of transmission lines and around 70 substations.

Connection to the rest of Europe

Former map of existing and planned HVDC interconnectors in Europe in 2012, Icelink labelled as number 1. HVDC Europe annotated 2012.svg
Former map of existing and planned HVDC interconnectors in Europe in 2012, Icelink labelled as number 1.

There are plans to connect the Icelandic grid with the UK using a subsea High-Voltage DC (HVDC) interconnector, with a potential capacity of up to 1.2GW, called Icelink. It would be the world's longest submarine HVDC cable, if built. This would allow Iceland to export excess energy to UK and in turn linking it to a wider European super grid. The project is in planning stages and is controversial in Iceland due to fears of increased domestic electricity prices as well as environmental damage from the resulting increase in power plants. [9]

In the 2019 UK General Election 2019, the Democratic Unionist Party included in their manifesto a version of Icelink in which Iceland would instead be connected to Northern Ireland. [10]

Iceland is active with the sale of Certificates of Origin in Europe. On 27th of April 2023 the Association of Issuing Bodies (AIB) suspended the export of Guarantees of Origin (GO) from Iceland due to the suspect of possible double counting. [11] As of today this ban has been lifted. [12]


Distribution

Electricity distribution is controlled by the following local utilities with local monopolies: [13]

Competition

The Icelandic electricity market is geographically isolated. The market was closed for competition prior to 1 July 2003. Almost all electricity was supplied by Landsvirkjun and sold through regional distribution companies. Landsvirkjun had a monopoly position on investment in generation. Full market opening began in 2006 e.g. with the opportunity to switch supplier. Contracts for large scale energy users were in general long term, up to 30 years with options for extension. [8]

Landsvirkjun, the largest electricity producer, had 76% annual production in 2007.The majority of the electricity is used in industry, mainly aluminium smelters and producers of ferroalloy. Landsvirkjun does not participate directly in the retail market for households and smaller businesses.

In the retail market the main companies are RARIK, Orkuveita Reykjavíkur and Hitaveita Suðurnesja.The last two have also entered into the market for energy intensive users. The households heated with electricity, not many, receive subsidies to make their heating costs comparable to hot water heating. [8]

Orkusalan was established as a joint venture between Landsvirkjun, and two large operators. The companies involved produced the majority of all electricity and own about 98 percent of the hydro power generation. The joint venture would have provided about 40 percent of the household electricity. According to the Icelandic Competition Authority the joint venture would have strengthen a dominant position of Landsvirkjun. The parties suggested that Landsvirkjun would pull out of the project, and subject to that condition the merger was allowed to proceed. Orkusalan commenced operation without Orkubu Vestfjarða. The later development should be updated. [8]

As of 2022, new retail resellers of electricity have come to market such as N1 Rafmagn, Straumlind and Orka Heimilanna. They have wholesale agreements to resell electricity mostly from Landsvirkjun. [14]

See also

Related Research Articles

<span class="mw-page-title-main">Geothermal power in Iceland</span>

Geothermal power in Iceland refers to the use of geothermal energy in Iceland for electricity generation.

<span class="mw-page-title-main">Electric power industry</span> Industry that provides the production and delivery of electric energy

The electric power industry covers the generation, transmission, distribution and sale of electric power to the general public and industry. The commercial distribution of electric power started in 1882 when electricity was produced for electric lighting. In the 1880s and 1890s, growing economic and safety concerns lead to the regulation of the industry. What was once an expensive novelty limited to the most densely populated areas, reliable and economical electric power has become an essential aspect for normal operation of all elements of developed economies.

Landsvirkjun, the National Power Company of Iceland, is Iceland's largest electricity generator. Landsvirkjun operates 21 power plants in Iceland concentrated on five main areas of operation.

<span class="mw-page-title-main">Energy in Iceland</span>

Iceland is a world leader in renewable energy. 100% of the electricity in Iceland's electricity grid is produced from renewable resources. In terms of total energy supply, 85% of the total primary energy supply in Iceland is derived from domestically produced renewable energy sources. Geothermal energy provided about 65% of primary energy in 2016, the share of hydropower was 20%, and the share of fossil fuels was 15%.

<span class="mw-page-title-main">Icelandic New Energy</span> Company

Icelandic New Energy Ltd is a company founded in 1999 following a decision in 1998 by the Icelandic Parliament to convert vehicle and fishing fleets to hydrogen produced from renewable energy by 2050.

<span class="mw-page-title-main">Renewable energy in Finland</span>

Renewable energy in Finland increased from 34% of the total final energy consumption (TFEC) in 2011 to 48% by the end of 2021, primarily driven by bioenergy (38%), hydroelectric power (6.1%), and wind energy (3.3%). In 2021, renewables covered 53% of heating and cooling, 39% of electricity generation, and 20% of the transport sector. By 2020, this growth positioned Finland as having the third highest share of renewables in TFEC among International Energy Agency (IEA) member countries.

<span class="mw-page-title-main">Synchronous grid of Continental Europe</span> Worlds largest single electric network

The synchronous grid of Continental Europe is the largest synchronous electrical grid in the world. It is interconnected as a single phase-locked 50 Hz mains frequency electricity grid that supplies over 400 million customers in 24 countries, including most of the European Union. In 2009, 667 GW of production capacity was connected to the grid, providing approximately 80 GW of operating reserve margin. The transmission system operators operating this grid formed the Union for the Coordination of Transmission of Electricity (UCTE), now part of the European Network of Transmission System Operators for Electricity (ENTSO-E).

<span class="mw-page-title-main">Orkuveita Reykjavíkur</span> Icelandic energy and utility company

Orkuveita Reykjavíkur is an Icelandic energy and utility company that provides electricity, geothermal hot water through district heating and cold water for consumption and fire fighting. It also operates a wholesale access fiber network and waste-treatment facilities. The company's service area extends to 20 communities in the south-west part of Iceland. Orkuveita Reykjavíkur is owned by the City of Reykjavík (93.5%) and the Municipalities of Akranes (5.5%) and Borgarbyggð (1%).

The Iceland Deep Drilling Project (IDDP) is a geothermal project established in 2000 by a consortium of the National Energy Authority of Iceland (Orkustofnun/OS) and four of Iceland's leading energy companies: Hitaveita Suðurnesja (HS), Landsvirkjun, Orkuveita Reykjavíkur and Mannvit Engineering. The consortium is referred to as "Deep Vision".

Landsnet is a transmission system operator of the Icelandic high-voltage power grid. It is a public company owned by the Icelandic government (93.22%) and Orkuveita Reykjavíkur (6.78%). The Icelandic government acquired shares previously held by Landsvirkjun, RARIK and Orkubu Vestfjarða in December 2022. Landsnet was established in 2005 by separating from Landsvirkjun. It is a member of the European Network of Transmission System Operators for Electricity.

<span class="mw-page-title-main">Electricity sector in Sweden</span> Overview of the electricity sector in Sweden

Majority of electricity production in Sweden relies on hydro power and nuclear power. In 2008 the consumption of electricity in Sweden was 16018 kWh per capita, compared to EU average 7409 kWh per capita. Sweden has a national grid, which is part of the Synchronous grid of Northern Europe. A specialty of the Nordic energy market is the existence of so-called electricity price areas, which complicate the wholesale Nordic energy market.

<span class="mw-page-title-main">Electricity sector in Denmark</span> Overview of the electricity sector in Denmark

Denmark's western electrical grid is part of the Synchronous grid of Continental Europe whereas the eastern part is connected to the Synchronous grid of Northern Europe via Sweden.

<span class="mw-page-title-main">Electricity sector in France</span> Overview of the electricity sector in France

The electricity sector in France is dominated by its nuclear power, which accounted for 71.7% of total production in 2018, while renewables and fossil fuels accounted for 21.3% and 7.1%, respectively. France has the largest share of nuclear electricity in the world, and together with renewable energy supplies, this has helped its grid achieve very low carbon intensity.

<span class="mw-page-title-main">Electricity sector in Japan</span> Overview of the electricity sector in Japan

The electric power industry in Japan covers the generation, transmission, distribution, and sale of electric energy in Japan. Japan consumed approximately 918 terawatt-hours (TWh) of electricity in 2014. Before the 2011 Fukushima Daiichi nuclear disaster, about a quarter of electricity in the country was generated by nuclear power. In the following years, most nuclear power plants have been on hold, being replaced mostly by coal and natural gas. Solar power is a growing source of electricity, and Japan has the third largest solar installed capacity with about 50 GW as of 2017. Japan's electricity production is characterized by a diverse energy mix, including nuclear, fossil fuels, renewable energy, and hydroelectric power.

Italy's total electricity consumption was 302.75 terawatt-hour (TWh) in 2020, of which 270.55 TWh (89.3%) was produced domestically and the remaining 10.7% was imported.

<span class="mw-page-title-main">HS Orka</span>

HS Orka is a privately-owned Icelandic energy company that produces electricity and hot water mainly from geothermal sources, mainly on the Reykjanes Peninsula. It is the third largest electricity producer in Iceland, after Landsvirkjun and Orka Nátturinnar. HS Orka operates two geothermal power plants: Svartsengi and Reykjanes, as well as a small hydropower station, Brú. As of 2022, its total installed electrical capacity is 215 MW, and 190 MWth geothermal hot water power.

Hitaveita Suðurnesja was an Icelandic energy company. The largest shareholder was Reykjanesbær. The company was founded as a geothermal energy firm in the southwest of Iceland in 1974. It built a power plant at Svartsengi to tap the geothermal energy in the area, and was completed in 1976. It was reportedly the first power plant in the world of its kind. It produced and distributed heating and electricity for the entire Sudurnes region.

<span class="mw-page-title-main">Icelink</span> Proposed electricity interconnector between Iceland and UK

Icelink is a proposed electricity interconnector between Iceland and the United Kingdom via Great Britain. At 1,000 to 1,200 km, the 800–1,200 MW high-voltage direct current (HVDC) link would be the longest sub-sea power interconnector in the world.

<span class="mw-page-title-main">Plug-in electric vehicles in Iceland</span>

The adoption of plug-in electric vehicles in Iceland is the second highest in the world after Norway, and fully supported by the government. As of 2022, the market share of electric vehicles in Iceland is around 60%, the second-highest in the world behind Norway. Around 14% of the country's passenger car fleet is electrified as of 2022.

References

  1. 1 2 Installed electrical capacity and electricity production in Icelandic power stations 2020 (PDF). Orkustofnun Data Repository (Report). Iceland Energy Authority. OS-2021-T014-01.
  2. "Electricity Generation". Orkustofnun (National Energy Authority, Iceland). Archived from the original on 7 January 2019. Retrieved 12 December 2023.
  3. 1 2 Energy in Sweden, Facts and figures Energiläget i siffror, The Swedish Energy Agency, Specific electricity production per inhabitant with breakdown by power source, (kWh/person) Source: IEA/OECD 2006 T23 Archived July 4, 2011, at the Wayback Machine , 2007 T25 Archived July 4, 2011, at the Wayback Machine , 2008 T26 Archived July 4, 2011, at the Wayback Machine 2009 T25 Archived January 20, 2011, at the Wayback Machine and 2010 T49 Archived October 16, 2013, at the Wayback Machine
  4. 1 2 Statistics Iceland.[www.statice.is/?PageID=1230&src=]
  5. "Hafið - Orka úr 100% endurnýjanlegum orkugjöfum". www.landsvirkjun.is (in Icelandic). Retrieved 1 March 2022.
  6. arnarph (5 May 2017). "Yfir 100 vindmyllur og 300 megavött". RÚV (in Icelandic). Retrieved 1 March 2022.
  7. Statistics Iceland
  8. 1 2 3 4 Capacity for Competition, Investing for an Efficient Nordic Electricity Market Report Archived 2010-11-26 at the Wayback Machine , The Nordic competition authorities 1/2007
  9. "Ákvörðun um sæstreng þarf að koma á næsta ári". www.mbl.is (in Icelandic). Retrieved 1 March 2022.
  10. "Election 2019: Digging into NI parties' manifestos". BBC News. 7 December 2019. Retrieved 28 April 2022.
  11. "Press release – 27 April 2023 - Regarding the compliance assessment of Landsnet's possible breach of EECS Rules N9.1.1, A2.1.2, C3.3.1 and E3.3.14" (PDF). www.aib-net.org/. Retrieved 5 October 2024.
  12. "Assessment of Potential Double Counting of Guarantees of Origin in Iceland". landsnet.is/. Retrieved 5 October 2024.
  13. "Almennir kaupendur raforku". Orkustofnun (in Icelandic). Retrieved 1 March 2022.
  14. "Rafmagn". Aurbjörg.is (in Icelandic). Retrieved 6 August 2022.