Electricity sector in Iceland
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The electricity sector in Iceland relies almost entirely on renewable energy: hydro power, geothermal energy and wind energy.[1] Two remote islands disconnected from the Icelandic grid rely on diesel generators, Grímsey and Flatey.
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 71% of produced electricity in 2011.[2]
Landsvirkjun is the country's largest electricity producer. The largest companies in the retail market 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 0.2% 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]
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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]
| Use | Production | Fossil | Other RE | Non RE use* | RE % | |
|---|---|---|---|---|---|---|
| 2004 | 29,724 | 29,724 | 34 | 29,690 | 34 | 99.9% |
| 2005 | 28,967 | 28,967 | 33 | 28,933 | 33 | 99.9% |
| 2006 | 39,900 | 39,900 | 0 | 39,900 | 0 | 100% |
| 2008 | 53,129 | 53,129 | 0 | 53,129 | 0 | 100% |
| 2009 | 52,625 | 52,625 | 0 | 52,813 | 0 | 100% |
| * Other RE is waterpower, solar and geothermal electricity and windpower until 2008 * Non RE use = use – production of renewable electricity RE % = (production of RE / use) * 100% Note: The European Union calculates the share of renewable energies in gross electrical consumption. | ||||||
Mode of production
Generating electricity in Iceland with geothermal energy has increased significantly in recent years, in response to the rapid expansion in Iceland's energy-intensive industry. The following table shows the installed generation capacity in MW as of the end of the year:[9]
| Year | Total | Hydro | Geothermal | Fuel-Oil |
|---|---|---|---|---|
| 2002 | 1,473.1 | 1,150.7 | 202.1 | 120.3 |
| 2012 | 2,658.6 | 1,885.1 | 659.0 | 114.5 |
Geothermal power
Power stations
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Transmission
The Icelandic Transmission System Operator (TSO) is Landsnet, a company jointly owned by three state-owned power companies: RARIK, Landsvirkjun and Orkubú Vestfjarða. All major transmission construction needs special permission from the Ministry. The Icelandic TSO is compensated for all costs.[10] 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.
HVDC Interconnector
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 HVDC cable, if built. This would allow Iceland to export excess energy to UK and in turn linking it to the wider European 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.[11]
Distribution
Electricity distribution is controlled by the following local utilities with local monopolies:[12]
- Veitur (Reykjavík and Capital Region)
- Straumlind (Reykjavík and Capital Region)
- RARIK (Nationwide and rural areas)
- Orkubú Vestfjarða (Westfjords)
- Norðurorka (Akureyri and surrounding area)
- HS Veitur (Reykjanes peninsula, Selfoss, Vestmannaeyjar and Hafnafjörður)
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.[10]
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.[10]
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.[10]
See also
References
- ^ "Energy Data". Askja Energy - The Essential Perspective on Energy in the Northern Atlantic and Arctic Region. 2012-05-03. Retrieved 2022-03-01.
- ^ Orkustofnun (National Energy Authority, Iceland)
- ^ a b 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
- ^ a b Statistics Iceland.[www.statice.is/?PageID=1230&src=[1]]
- ^ "Hafið - Orka úr 100% endurnýjanlegum orkugjöfum". www.landsvirkjun.is (in Icelandic). Retrieved 2022-03-01.
- ^ arnarph (2017-05-05). "Yfir 100 vindmyllur og 300 megavött". RÚV (in Icelandic). Retrieved 2022-03-01.
- ^ Statistics Iceland
- ^ Energy in Sweden, Facts and figures, The Swedish Energy Agency, (in Swedish: Energiläget i siffror), Table: 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.
- ^ Statistics Iceland
- ^ a b c d 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
- ^ "Ákvörðun um sæstreng þarf að koma á næsta ári". www.mbl.is (in Icelandic). Retrieved 2022-03-01.
- ^ "Almennir kaupendur raforku". Orkustofnun (in Icelandic). Retrieved 2022-03-01.