Dr. Guðni Jóhannesson,National Energy Authority Iceland Geothermal Conference 2013 March 5-8, 2013, Harpa, Reykjavík

1. Orkustofnun
The National Energy Authority
The Role of Government
Initiatives and Public
Administration in the
Icelandic Geothermal Sector
Iceland Geothermal Conference 2013
Harpa Reykjavik 7.3.2013
Prof.dr. Gudni A Jóhannesson
Director General

2. Role of Orkustofnun
The National Energy Authority (1/2)
• Public administration of the energy
sector and specialist services to the
government
• Long term planning of energy
utilisation and the energy system
• Contracting and conducting research
on resource utilisation
• Accumulating and maintaining
databases on energy utilisation and
forecasts for futiure trends

3. Role of Orkustofnun
The National Energy Authority (2/2)
• Issues permits for exploration and utilisation of
energy and earth based resources
• Issues power plant licences
• Is the regulator for the national grid
• Is the official monitoring body of issued licenses
• Is the fuel sector administration and works on
transition to low carbon fuels
• Administrates The Energy Agency, The Energy Fund
and special initiatives for geothermal exploration
• Hosts the UN University Geothermal Training
Programme

4. Ministry for the Environment
and Natural Resources
Master Plan Act
Water Governance Act
Municipal Planning Act
Nature Conservation Act
EIA Act
SEA Act
Ministry for Industries and
Innovation
Act on Orkustofnun
Electricity Act
Energy and Mineral
Resources Act
Water Resource Act
Hydrocarbons Act
Seafloor Act
Energy - Public Administration
The Legal Environment

5. State
ownership
Municipal
ownership
Private
ownership
Land
Energy
resources
Owner - no sale
to private
Owner – no
sale to private
Owner
sale to private
Energy
company
Unl. ownership
Time limited
contract
Unl. ownership
Time limited
contract
Unl. ownership
Transmission
and distribution
Regulated
companies
Regulated
companies
Regulated
companies
Ownership - resource control – operation - grid

6. Limited
research
licence
Utilisation
licence
(geoth.)
YES
EIA
Wait
NO
EIA ?
Master
Plan
Report
land
impact
General
Plan,
Permits
Resource
contract
Exploration
Operational
licence
Building
permit
Power
plant
licence

7. Orkustofnun – The national
energy authority
Research licence
Utilisation licence
Power plant licence
Transmission regulation
Distribution regulation
Ruling committee
Resource Act
Ruling committee
Electricity Act

8. Energy and mineral resources Act
The act covers resources below surface, at the bottom of
rivers and lakes and at the bottom of the sea within
netting limits. The Act also covers exploration for
hydropower for the generation of electricity.
Electricity Act
According to the Act a licence issued by Orkustofnun is
required to construct and operate a power plant.
However, such a licence is not required for power plants
with a rated capacity of less than 1 MW, unless the
electricity produced is delivered into a distribution system
or into the national transmission grid.

9. (1)Ownership of resources cannot be
sold from the state and
municipalities. Utilisation rights
can be leased to a developer for
up to 65 years with a possibility of
extension. Royalties are
determined by the Prime Minister.
(2)Producers of electricity compete
on an open market in Iceland.
Therefore CHP power plants are
obliged to keep separate accounts
for heat and power production to
prevent cross subsidisation of
electricity and heat.
3. Orkustofnun grants licences for
research, utilisation and new
power plants
4. Appeals are made to ruling
committees
5. The Masterplan Act
6. The Act on water governance
(EU water framework directive)
Six Recent Amendments to the Energy
Legal Framework in Iceland:

10. •The amount of fluid extracted or
reinjected into each well in the
geothermal field, each month.
•The temperature of the water
reinjected into the geothermal
reservoir each month.
•Results of water level
measurements in wells in which the
water level can be measured and
are within the geothermal field.
•The pressure changes or
drawdown determined in the
geothermal reservoir.
•The results of measurements of the
enthalpy of the fluid from every
production well in the geothermal
field.
Annual Geothermal Monitoring by Orkustofnun
•Chemical analysis of the
geothermal water (and steam, if
appropriate).
•Results from simulations of the
geothermal reservoir.
•Results of measurements made to
monitor changes in the geothermal
reservoir.
•Information on drilling in the
industrial area.
•A resume of improved
understanding of the physical
characteristics of the geothermal
reservoir based on the results of the
latest drilling.

11. Space heating by source 1970-2011

12. Hydropower
1885 MWe
12337 GWh
Geothermal
665 MWe
5210 GWh
Fossil fuels
115 MWe
3 GWh
General use 3.119 GWh 17.8%
Large industries 13.545 GWh 77.3%
System loss 546 GWh 3.1%
and plant use
Electricity Generation and Use 2012

13. Comparison of Energy Prices for
Residential Heating Mid Year 2011

14. Avoided Cost by Harnessing
a Domestic Source of energy
Savings in 2008 equivalent to 91% of the total imports of refined oil products.
Between 1970-2008 estimated 900 billion ISK avoided.

15. Three Important Energy Policy Documents
A new energy policy (in progress)
The Master Plan Act
Transition from fossil fuels in the mobile
sector

16. The Alternative Fuel Race
Infrastructure
Environmental efficiency
Mobility Operational cost
Recycled carbons
Hydrogen
Batteries
Hybrids ?

17. Master Plan for Utilisation of the Energy
Resources – 2nd phase
• New Electricity Act in 2003 diminished the role of the
State, as a free market was allowed to be developed for
electricity production
• Second phase of the MP was initiated in 2004 and the
final report issued in 2011
• Ranking of projects by the steering committee as in the
1st phase
• In total 40 hydropower projects (16,6 TWh/a) and 41
geothermal projects (30,7 TWh/a) were evaluated and
ranked on environmental impact and feasibility

18. Act on Master Plan for Protection and
Development of Energy Resources
• Act passed in May 2011, transforming the
Master Plan process into an established and
permanent planning tool
• Regular re-evaluation phases every 4 years
• Approval by parliamentary resolution
• Results to be binding for municipal land use
planning
• Takes river basin management plans into
account (Act on Water Governance)

19. Parliamentary Resolution
• Proposal on the basis of the final report in 2011 for a
parliamentary resolution, with classification of projects into
3 classes:
1. projects appropriate for development,
2. projects appropriate for protection, and
3. projects awaiting further consideration
• Put forward for SEA by the Minister of Industry supported
by the Minister for the Environment
• Public hearing of the proposal finished Nov 11, 2001
• About 200 responses received from the public
• Final proposal passed as a Parliamentary Resolution on
Jan 14, 2013

20. Class Sizes in Final Resolution
Electric Power Potential Hydro
GWh/a
Geo-
thermal
GWh/a
Electricity Production (2010) 12.592 4.465
Appropriate for Development 1.024 8.801
Existing & To be developed 13.616 13.266
Appropriate for Protection 7.745 17.765
Awaiting further Consideration 8.310 4.205
Total – Existing & Master Plan 29.671 35.236

21. 50 MW
100 MW
200 MW
Geothermal Electric Powerplants (>10 MW)
Existing & To be developed by Master Plan
National Energy Authority, Kristinn Einarsson, September 2011
ExistingTo be
developed
100 MW
200 MW
50 MW

22. Jónas Ketilsson <jonas.ketilsson@os.is>
Takk fyrir
Takk fyrir
Orkustofnun | Grensasvegur 9, IS-108 Reykjavik |