New base special 29 january 2014

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NewBase 29 January 2014 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
DP World pioneers world’s largest semi-automated facility
www.khaleejtimes.com
DP World’s Jebel Ali Container Terminal 3 (T3), inaugurated on late Monday by His
Highness Shaikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime
Minister of the UAE and Ruler of Dubai, is set to be the world’s largest semi-automated
facility.
With 19 highly sophisticated automated quay cranes and 50 automated rail mounted gantry (RMG)
yard cranes, T3 will be at least 30 per cent more carbon efficient than a conventional terminal
operation. Importantly, automation will transform the workplace at the port, creating around 1,000
skilled jobs. And with the cranes operated from a purpose built operations building set apart from the
quayside using remote control technology, the work has attracted highly skilled — and diverse —
people. About 30 per cent of the new quay crane operators recruited are Emiratis, and of those, a
third are women. The figure is even higher for RMG operators, with 70 per cent of those recruited
Emiratis and 70 per cent of that group being Emirati women.
Shaikh Mohammed, accompanied by Shaikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown
Prince of Dubai, and Shaikh Maktoum bin Mohammed bin Rashid Al Maktoum, Deputy Ruler of
Dubai, was welcomed to T3 by Sultan Ahmed bin Sulayem, Chairman, DP World; Mohammed Sharaf,
Group CEO, DP World; Mohammed Al Muallem, Senior Vice-President and Managing Director, DP
World, UAE Region, and other senior officials.

During his visit, Shaikh Mohammed talked with some of the new female recruits about their new roles
and viewed construction of the pioneering Terminal 3, which will add four million twenty foot
equivalent container units (TEUs) capacity to the port this year, taking total capacity to 19 million
TEUs.
“Jebel Ali is one of Dubai’s jewels and continues to lead the industry by pioneering large scale
automation. This is also in line with His Highness’s vision of transforming Dubai with smart systems
using technology,” Bin Sulayem said.
Jamal Majid bin Thaniah, Vice-Chairman, DP World, said: “Jebel Ali is the model for our global
portfolio of more than 65 marine terminals across six continents including the new developments we
have underway in Europe, Africa, India and the Middle East. The unrivalled efficiency and connectivity
of Jebel Ali, plus the adjacent free zone, home to around 7000 companies, has been and continues to
be a driver of growth for the economy not just of Dubai and the UAE but for the wider region of some
two billion people from the subcontinent to East Africa.”
Mohammed Sharaf said automation and new technology are the way of the future and will help “our
customers and the wider supply chain” realise the efficiencies on land that the new mega-ships
generate at sea.
“They are a giant leap forward in terms of customer service. They will also make a significant
difference as we gear up for Expo 2020, with tried and tested infrastructure that will support the
preparation for this important event.” Mohammed Al Muallem said the expansion of Terminal 2,
which we opened in June last year, and the opening of T3 this year mean “we will be able to handle ten
of the largest vessels afloat simultaneously — the only port in the region able to do so”.
“With the forthcoming connection of Etihad Rail to Jebel Ali, the port will be part of a multi-modal
supply chain that seamlessly links sea-road-rail and air through the Dubai Logistics Corridor,
reinforcing our position as the premier gateway for the region and the entire Middle East. Planning for
the long term is something we have always done and will continue for the benefit of future
generations,” he said.
One of the new women crane operators gave His Highness a live demonstration of a remotely
controlled quay crane during his visit to the port.

QP, Honeywell unit in research deal on gas purification
http://www.gulf-times.com/Default.aspx
Qatar Petroleum (QP) and UOP, a Honeywell company, have signed a joint research agreement on
“Process Optimisation of CO2 and Sulphur Components Removal from Natural Gases.” The agreement was
signed at the QP headquarters by HE the Minister of Energy and Industry Dr Mohamed bin Saleh al-Sada,
who is also the chairman of QP, and Dr Rajeev Gautam, president and CEO of UOP.
HE al-Sada
presents a memento to Gautam after signing the agreement.
The primary aim of the research is for the treated natural gases to be more efficiently utilised in further
processing operations such as in transporting natural gas in pipelines, in the production of liquefied
petroleum gas (LPG), natural gas liquids (NGL), liquefied natural gas (LNG), gas-to-liquids (GTL) products,
and in associated/non-associated gas cleanup in upstream petrochemical/fertilizer manufacturing plants.
Al-Sada hailed the agreement as an important milestone in Qatar’s gas industry. “Qatar is constantly
working to facilitate the optimum development of its hydrocarbon resources, and this agreement is another
step in that direction. Developing more efficient technologies to remove contaminants from natural gas will
help boost Qatar’s reputation as a safe, reliable supplier of natural gas as well as high-quality products.”
Dr Gautam pointed out that global natural gas demand is growing rapidly and LNG/LPG/NGL/GTL
production is critical to meeting the needs of regions not served by pipelines and to enable global trade.
“Qatar Petroleum is a recognised leader in the production of LNG/NGL for world markets, and we look
forward to extending our long-standing partnership to develop technology in these important fields,” he
said.
QP operates its offshore gas platform and five NGL plants at Mesaieed Industrial City. It also has joint
ventures with Qatargas (the world’s largest LNG producer), RasGas (the world’s second-largest LNG
producer), Shell’s Pearl GTL (which operates in Qatar the world’s largest GTL plant) and Oryx GTL (which
operates the second-largest GTL plant in Qatar).
QP recently inaugurated a state-of-the-art research and technology centre at the Qatar Science and
Technology Park to carry out cost-effective research activities on subjects related to surface/sub-surface
activities in oil and gas fields in co-operation with global R&D centres. Honeywell’s UOP is a leader in
natural gas treating technologies, which currently are used in QP’s LNG and gas processing facilities.

Bulgaria eyes LNG deal with Qatar to diversify Balkan supply sources
By Pratap John/Chief Business Reporter , www.gulf-times.com
Bulgaria expects to sign an agreement with Qatar for liquefied natural gas supply even as it seeks Qatari
investment in a major LNG terminal project in Greece that will diversify supply source to many Balkan
countries in Europe. “Today we have discussed these issues with Qatar and are happy about the outcome
of the talks with the country’s leadership,” said Bulgarian Minister of Economy and Energy Dragomir
Stoynev in an interview with Gulf Times in Doha yesterday.
Stoynev said the proposed LNG regasification terminal would provide the “much needed security of supply”
of natural gas for his country. “Currently, our only supplier is Russia, which provides Bulgaria piped gas.
During the 2009 Russian – Ukraine conflict our supply was disrupted. It took strenuous efforts to restore
supplies then,” Stoynev said. If Qatar invests in the LNG terminal project, the Bulgarian minister said,
“Your country will have a wider market as many Balkan countries such as Serbia, Macedonia, Kosovo and
Albania will make use of the Qatari gas.
Interconnectors are now being built to give Baltic States access to the project. “Our interconnector with
Romania has already been built. This year, we will interconnect with Greece. An interconnection with
Serbia has also been taken up. And during the Turkish energy minister’s recent visit to Sofia, we started to
negotiate on an interconnector with Turkey.” Stoynev said the European Union is supporting the project.

“It is in the EU’s priority and hence it is a European project. Qatar’s Prime Minister HE Sheikh Abdullah bin
Nasser bin Khalifa al-Thani has expressed interest in the project.” Explaining why Greece had been chosen
as the LNG terminal location, Stoynev said, “It is impossible to set up such a facility on the Black Sea as it
will impact the movement of ships through Bosporus.”
The proposed terminal is planned on the northern coast of Greece, he said. “If Qatar invests in the facility,
it can enter the gas market in the southeast European region,” the Bulgarian minister said. He said if the
two countries reached an agreement on LNG supply, Qatar would become the first LNG supplier to
Bulgaria. Stoynev said his country currently imported oil, gas and black oil. The domestic production of
natural gas meets only around 15% of the country’s annual consumption. Bulgaria has substantial reserves
of lignite coal, nuclear energy and has begun developing renewable energy sources.
“But at the moment, we are not able to
meet our energy needs without importing
energy,” Stoynev said. The Bulgarian side
also held talks with Qatar Holding (QH)
yesterday, seeking investments in a planned
highway passing through many Balkan
countries. The highway will come in handy
for trucks movement from Ukraine to
Turkey. Bulgarian Deputy Minister of
Economy and Energy Krassin Dimitrov said
his side also sought Qatari investment in an
investment fund targeting small and medium enterprises (SMEs) and in a power project based on lignite
coal. He said a presentation was made before Qatari Diar for investment in a prime real estate mixed use
project in Sofia. “I understand they are interested in the project,” Dimitrov added.
Comments :-
By 2030 experts project that most use of oil for power generation has been displaced, with coal and NG
being the primary fossil sources. NG use will increase to about 40% of the market, outside of Europe, where
it rises to 65%, given the European concern over climate change. However, in terms of the absolute market,
Europe will see a much greater impact from renewable resources generating power, so that the percentage
that NG provides will only rise to 24%. Over half the NG supply in North America will come from shale gas
and coal bed methane (CBM), elsewhere the impact from those resources will, within this time frame, be
much less. Whether or not these unconventional resources reach the 57% market supply by 2030 will likely
depend on the development of at least one new technological breakthrough that lowers cost while
increasing long-term yield from the wells, but that is a quite feasible assumption.

NewBase : Special Case Study , Benchmark for the GCC power
Transmission & Generations
Posts from the ‘Transmission and Utilities’ Categoryhttp://askjaenergy.org/category/transmission-and-utilities/
The Nordic Energy Infrastructure is Gaining Interest
Public ownership is widespread in the energy sector of the Nordic countries. This especially
applies to the transmission system operators (TSO’s). Strong state ownership is also the norm
regarding all the main electricity producing companies and oil exploration companies in the
Nordic countries. However, private investment has been increasing in the Nordic energy sector,
especially in energy infrastructure projects and renewable energy production.
The Norwegian electricity company Statkraft and the
Norwegian TSO Statnett are both 100% owned by the
Norwegian state. Norwegian oil giant Statoil is 70.9%
owned by the Norwegian state.
The Swedish electricity company Vattenfall is 100%
owned by the Swedish state and so is the Swedish
TSO Svenska Kraftnät. Finnish electricity
company Fortum is 50.76% owned by the Finnish
state. And the Finnish TSO Fingrid is 53.1 % owned
by the Finnish state.
Icelandic electricity company Landsvirkjun is 100% owned by the Icelandic state. And the
Icelandic state owns 87.24% in the Icelandic
TSO Landsnet (through 100% state owned
Landsvirkjun and Rarik). In Denmark, the Danish
state has owned 76,49% in the energy
company Dong Energy. And the Danish
TSO Energinet.dk is 100% owned by the Danish
state.
Thus, all the major Nordic electricity companies
and the TSO’s are controlled by the relevant
Nordic state, and also the main Nordic oil
exploration companies. Although this ownership
structure of the Nordic energy sector will probably
not change much in the near future, we may be
experiencing increased private investments in
certain parts of the Nordic energy sector. This
seems especially to apply to infrastructure and
renewable energy.
Substantial private investment is already to be found in Statoil (oil & gas), Fortum (electricity),
Fingrid (TSO), and in Dong Energy (oil, gas, heating & electricity). In addition, the Norwegian

state has sold large share of the natural gas transportation infrastructure system that links the gas
resources of the Norwegian continental shelf with the neighbouring countries. Today, the
Norwegian state owns only 45.8% stake in
Gassled (through the state owned oil license
investing company Petoro), plus its stake
through Statoil, which owns 5% in Gassled. The
major private investors in Gassled are Abu
Dhabi Investment Authority, Canada Pension
Plan Investment Board, and the German
insurance and financial services
group Allianz (together they own 24.75% in
Gassled).
The most recent private investment in the
typically state owned Nordic energy sector took
place earlier this year (2013). When two funds
(managed by Goldman Sachs) and two Danish
pension funds (Arbejdsmarkedets
Tillægspension; ATP, and Pension
Forsikringsaktieselskab; PFA) agreed to buy
26% stake in the Danish Dong Energy. When
this 2 billion USD deal will be finalized
(probably within a few weeks) it is expected
that Goldman Sachs will own approximately 19% in Dong Energy, ATP approximately 5% and PFA
approximately 2%. The Danish state will still be owner of more than half of the shares in the
company.
It is expected that this deal will allow Dong to strengthen its balance sheet (hit by falling electricity
demand due to the economic crisis and competition from coal) and to pursue its ambition to
become a leading player in offshore wind energy. Thus, the deal has a strong renewable energy
aspect. Dong Energy is already European market leader with almost 2 GW of offshore wind power
installed in Denmark, Britain and Germany. And the company wants to more than triple that to
6.5 GW by 2020.
The investments by the Goldman Sachs funds, Abu Dhabi Investment Authority, the Canadian
pension fund, and Allianz are good examples of increased interest in the Nordic energy
infrastructure and renewable energy. This may be a positive development, having regard to
financing of the IceLink (an electric cable between Iceland and the UK). Financing projects like
that could be perfect fit for large pension funds and investment vehicles.
Upcoming New World Record Subsea Electric Cables
An electric subsea cable between Iceland and Europe is currently being considered.
The cable, sometimes referred to as IceLink, will be approximately twice as long as the longest
subsea electric cable today, which is the NorNed cable between Holland and Norway (NorNed is
580 km, with a capacity of 700 MW). It seems likely that we will soon see a substantially longer
cable than the NorNed, which will be a new cable between Norway and the United Kingdom (this
new cable will be more than 700 km long, with a capacity of 1,400 MW). However, an even more
ambitious project is being planned in the Mediterranean; the EuroAsia Interconnector.

The EuroAsia Interconnector project aims to link
the power grids of Cyprus, Greece (including both
Crete and the Greek mainland) and Israel. The total
length of the cable will probably be between 1,000
and 1,500 km, and have a capacity of 2,000 MW. It
will travel through an enormous depth of more
than 2,500 m.
Firstly, a 330 km cable will link Israel with Cyprus.
Further, Cyprus will be connected with the Greek
island of Crete via an 880 km long cable. From
there Crete will be connected to Greece via a 310
km long cable, providing a connection to the pan-
European electricity grid.
In March 2012, Cyprus and Israel initiated a
feasibility study to explore the possibility of the
EuroAsia Interconector connecting the grids of the
two countries. The project is expected to be
completed in 36 months from the start of
construction. The interconnector will be funded and
developed by DEH Quantum Energy, a joint venture
consisting of Greece’s DEH and Cyprus’ Quantum
Energy, with the Bank of Cyprus as a minority
shareholder.
In comparison with the EuroAsia Interconnector, the
IceLink between Iceland and Europe seems to be a very positive and even a simple project. While
the EuroAsia Interconnector will mainly transfer electricity generated by burning natural gas, the
IceLink is based on renewable hydro- and geothermal power. The IceLink is likely to be close to
1,200 km (if connecting Iceland and UK) and the maximum depth of the route is close to 1,000 m.
As the depth is one of the main challenges for subsea
electric cables, it is interesting that the EuroAsia
Interconnector will be at more than twice as much
depth as the IceLink.
The EuroAsia project has recently been added to the
European Commission’s list of Projects of Common
Interest (PCI). This recent list of 248 key energy
infrastructure projects was adopted by the European
Commission on 14 October 2013. These projects will
benefit from faster and more efficient permit granting
procedures and improved regulatory treatment,
and may also have access to financial support from
the Connecting Europe Facility (CEF). The CEF has a
budget of EUR 5.85 billion that has been allocated to trans-European energy infrastructure for the
period 2014-20. The current plan is to have the EuroAsia Interconnector up and running as soon
as 2017.
Nov 4

Successful Energy Summit in London
The Iceland Energy Summit was held in London on November 1, 2013. The event was organized by
the British-Icelandic Chamber of Commerce (BICC) and hosted by Bloomberg.
The event provided insight into Iceland’s renewable
energy resources, the birth and growth of the data
storage industry in the country, as well as the search
for offshore oil on the Icelandic continental shelf.
Strong focus was on a plan for an undersea power
cable to connect the British and Icelandic grids. This
plan or proposal is attracting strong investor
interest, according to Mr. Charles Hendry, the
former Energy Minister of the United Kingdom and
current Member of Parliament.
Mr. Hendry, who promoted the project, said that
there’s “no doubt that in Britain the political will is
there, so if there is a political will in Iceland, we want to work together”. According to Mr. Hendry
the project offers low-risk, predictable returns attractive to institutional investors including
pension funds. The UK is preparing to change policies needed for the cable, Mr. Hendry said.
In May last year (2012), Mr. Hendry helped spur an agreement between Iceland and the UK to
explore proposals regarding the cable (sometimes referred to as the IceLink). The cost of the link
is still not clear, but if it will go ahead it could probably be completed within 7-10 years.. It would
extend more than 1,000 kilometers, thus be longer than any of the subsea electrical cables
currently in operation.
Electric cables like that already connect
the grids of Norway and Britain to the
Netherlands. The Dutch grid operator
(TenneT) is planning links between
Germany and Norway and the
Netherlands and Denmark. There are
already connections of this type between
Britain and France, between Vancouver
island and Canada, between Sardinia
and Italy, and between Tasmania and
Australia, to name a few well known
examples .
According to Bloomberg, Mr. Andrew Perkins, a partner in energy and environmental finance at
Ernst & Young, stresses that these assets are attractive to financiers, suggesting that the capital
costs to build the IceLink should be financed by the private sector. As close to 100 percent of all
electricity generated in Iceland comes from natural renewable sources, and several promising
renewable energy options are still unharnessed, the IceLink offers great opportunity for the UK to
access substantial green power at a very competitive cost.
Here, at the Icelandic Energy Portal, we will soon be covering the Energy Summit in more details.
Note that the slides (and videos) from the event can be downloaded from the website of the BICC.

1 GW Iceland-UK Electric Subsea Cable May be Close
The governments of United Kingdom (UK) and Iceland may both be interested in a subsea electric
connection between the countries.
The main purpose of the cable would be to bring
electricity from Iceland’s renewable sources to the
UK. The UK has ambitious plans to substantially
increase renewable energy in UK’s energy mix.
According to legally binding goals, set by the
member states of the European Union (EU), the UK
needs to dramatically increase production and
imports of renewable energy. Iceland could become
an important player in that green transformation.
Renewable electricity could be provided by Iceland
to the UK even at a cheaper cost than offshore wind.
In addition the Icelandic hydro- an geothermal power is a very reliable power source. The plans
being discussed concern a 1,100-1,200 km subsea cable with a capacity of 1GW. The package might
be worth an estimated GBP 4 billion, with the inclusion of related generation and onshore
transmission investments and could be operational by within a decade.
Mr. Bjorgvin Sigurdsson, executive vice president of
Iceland’s main power company (Landsvirkjun), has
expressed that the company is now looking at this
much more seriously than ever before. “The
technology seems to be there to make it work… the
issue is whether this makes sense economically.”
At present, Iceland benefits from some of the most
competitive electricity prices in Europe. All the
electricity in Iceland comes from renewable hydro-
and geothermal sources, which offer the possibility of
a very low cost generation. The director general of the National Energy Authority of Iceland
(NEA), Mr. Guðni Jóhannesson, has said that the interconnector could provide power to the UK at
around 60 to 70 percent of the price of offshore wind.
As Iceland still has numerous options of
unharnessed hydro- and geothermal energy, an
electrical cable might create a win-win situation for
Iceland and the UK. The idea of exporting energy
from Iceland to the UK is not a new one, as it was
first mentioned decades ago. However, it is not until
recently that technological advancement and rising
electricity prices in Europe made the idea feasible.

Data Centers in Iceland offer Dramatic Savings
Businesses overseas are turning to Iceland to host their data, making use of cheaper energy and
natural cooling resources. Icelandic datacenters do not only offer very competitive prices, but also
reduce carbon footprint and improve green credentials, as they are
powered by renewable electricity only (from natural hydro- and
geothermal resources).
A recent study by PricewaterhouseCoopers found that the operating
expenditure of a 10,000 sqf data center in Iceland, over a 15 year period,
is USD 130 million cheaper than running it in the United Kingdom or in
Continental Europe. Thus, Iceland offers dramatic savings in the long
run.
According to Invest in Iceland, a government body provides information
to foreign investors, a fifth of data centre costs are spent on power. Half
of that is used for cooling. In Iceland, businesses have access free-air
cooling all year round and thus saving substantially on cooling costs.
In addition, the electricity is much cheaper in Iceland than in the rest of Europe. In Iceland, data
centers are currently being offered power at the price of USD 0.043 (4.30 cents) per kWh, which is
less than half of the price which is common in other European countries. This low Icelandic price
can be locked up for at east 12 years, offering businesses a clear understanding of operating
expenses in the long run.
Furthermore, while cost is one of the major factors attracting data centre investment and services
to Iceland, carbon footprint is also an important driver for European businesses to consider
Iceland as a location for their data. As European carbon taxes begin to bite, companies are looking
towards Iceland’s carbon free data centers as a long-term option to demonstrate their
commitment to green IT. Currently, three data centers have been constructed; the Advania,
GreenCloud and Verne Global.
The Icelandic electricity generation and
distribution ranks as one of the most reliable in
the world. Thus, Iceland data centers offer
99.999% uptime, and power companies are
willing to put that uptime in the contract
agreement. Connectivity to the Icelandic data
center facilities is provided by redundant,
high-capacity, multi-terabit-per-second
connections, including Farice, Danice and
Greenland Connect.
Volcanic activity in Iceland may have the effect making investors reluctant to invest in data centers
in Iceland and same may apply to businesses regarding hosting their data in the country. But the
fact is, that large areas in Iceland have no volcanic activity and none seismic risk. In a nutshell, the
risk for data centers from natural hazards or extreme weather are no higher in Iceland than in
most other European countries.

The regulatory environment in Iceland is clear and is
built on European standards (Iceland is a full
member of the European Economic Area; EEA).
Numerous agencies and local governments are
willing to assist companies interested in investing.
Our readers are welcome to contact us at the
Icelandic Energy Portal for more information. You
can either send e-mail to partners@askjaenergy.org
or call us at +354-863-8333.
Icelandic Energy in the New York Times
“In a nation with only 320,000 people, the state-owned power company, Landsvirkjun, which
operates the Krafla facility, sells just 17 percent of its electricity to households and local industry.
The rest goes mostly to aluminum smelters owned by the American giant Alcoa and other foreign
companies that have been lured to this remote North Atlantic nation by its abundant supply of
cheap energy.”
These words are from an article published by the
New York Times (NYT) a few days ago. The article
describes how electricity generated by harnessing
Iceland’s extensive renewable energy sources may
possibly be exported to consumers in the European
Union (EU). Such an export could result in a very
substantial increase in profits for the generating
companies in Iceland. The aluminum smelters are
paying prices believed to be less than 30 USD per
MWh. Which is, according to the NYT, less than half
the going rate in the EU and barely a quarter of
what, according to the Renewable Energies
Federation, a Brussels-based research unit, is the
average tariff, once tax breaks and subsidies are
factored in, for renewable electricity in the EU.
Currently, Landsvirkjun is conducting a research into the possibility of a submarine electric cable
(a High Voltage Direct Current cable or HVDC) to connect the electricity markets of Iceland with
the European market. The cable would be approximately three times longer than the link between
Norway and the Netherlands, which is currently the world’s longest submarine electricity cable. It
is to early to say what would be the preferable connecting point in the EU; it could be Scotland, the
Netherlands, Germany, or even Norway.
A connector between Iceland and Europe would not only offer the Icelandic electricity generating
companies the possibility of substantially higher price for their product. Such a cable would also
make it possible to import electricity to Iceland in periods of low electricity prices at the other end
of the cable (such as during the night). The connector would also increase the energy security in
Iceland, as the country would be less dependent on keeping large emergency reserves, as it does
now. For the EU this would also be an attractive project – not least as the Union’s 27 member

states agreed in 2009 to a mandatory target of deriving at least 20 percent of its energy from
renewable sources by 2020.
Landsvirkjun’s CEO, Mr. Hörður Arnarson, has described the possible cable as a very promising
project. “We have a lot of electricity for the very few people who live here.” Compared with the
rest of the world, he said to the NUT, Iceland produces “more energy per capita by far, and it is
very natural to consider connecting ourselves to other markets.”
It is expected that final decision on the cable will be taken within two years or so. For more
information about the cable and the importance of EU’s energy policy for Iceland, please check out
our earlier post on the issue.
Gaining from the European Green Drivers
Electricity prices in Iceland are substantially lower than anywhere else in Europe. While common
wholesale prices for electricity in Iceland are equivalent to 25-30 €/MWh, the wholesale prices
in Europe are often double that and even more. This winter, for example, the average wholesale
price at the European Power Exchange (EPEX SPOT) has been close to 50 €/MWh.
This means that if Iceland would have an electric cable connection with Europe, electricity could
be sold from Iceland at a much higher price than being possible in the small Icelandic market.
This makes the European continent, Scandinavia and the United Kingdom a very interesting
market for Icelandic generating firms.
STRONG DRIVERS:
High electricity prices in Europe are not the only
driver, creating more demand for Icelandic
electricity. Almost all electricity in Iceland is
generated by utilizing renewable sources (hydro-
and geothermal power). The European Union (EU)
has adopted a binding plan to greatly increase the
share of renewable energy. According
to EU’s Renewable Energy Directive, the Union is
going to reach a 20% renewable energy target for
2020 – more than double the 2010 level of 9.8% –
as well as a 10% share of renewable energy in the
transport sector. The targets will help to cut
greenhouse gas emissions and – what may be even
stronger incentive – reduce the EU’s dependence on
imported energy.
According to the Directive, the member states have taken on binding national targets for raising
the share of renewable energy in their energy consumption by 2020. These targets range from 10%
in Malta to 49% in Sweden. The national targets will enable the EU as a whole to reach its 20%
renewable energy target for 2020 – more than double the 2010 level of 9.8% – as well as a 10%
share of renewable energy in the transport sector.

UK AS EN EXAMPLE:
It is noteworthy that to be able to
reach the targets, it is expected
that for example the United
Kingdom needs to add more than
170 TWh of annual renewable
energy by 2020 (UK needs to go
from present less than 60 TWh to
approximately 230 TWh by
2020). This is according to
the 2011 UK Renewable Energy
Roadmap (pdf) and the 2012
Update (pdf).
It is not clear how large share new renewable
electricity will be of this total renewable energy
addition of 170 TWh. However, from the 2011 UK
Renewable Energy Roadmap it can be expected
that the goal for 2020 may be somewhere between
104-155 TWh of annual renewable electricity
generation (as described in a table marked as figure
2 in the Roadmap; shown here above). The current
annual renewable electricity generation in the UK is
somewhere between 34-38 TWh. Thus, the goal of
104-155 TWh of total electricity from renewable
sources by 2020, will call for a new annual
renewable electricity production of 66-121 TWh.
Possibly, it would be fair to say that the UK needs to
add close to 100 TWh to its annual renewable
electricity generation. And this is to happen within seven years from now.
HOW ICELAND CAN PLAY A ROLE:
EU’s plan for increasing renewable energy allows the member states to import renewable energy
from other countries. Iceland can offer substantial amount of electricity from renewable sources at
very competitive prices (currently, the Icelandic power company Landsvirkjun offers new 12 year
contracts at 43 USD/MWH, which equals approximately 32 €/MWh). It may be totally realistic
that some of UK’s new renewable electricity will come from Iceland.
Iceland’s hydro- and geothermal power is less costly than for example new wind farms in the
UK. In addition, Icelandic hydro- and geothermal power is a stable base-load power, unlike wind
and unlike solar.
An electric cable between Iceland and the UK might be a win-win project. UK would gain access to
reliable base-load renewable electricity. Icelandic power companies would increase their profits
and could utilize the cable to import electricity from the UK when prices there are low (for
example during the night, when demand is minimal).
Such a high voltage direct current (HVDC) cable is currently being seriously considered by a group
of Icelandic power companies and other stakeholders. This would be a technically and financially

complicated project and probably it will take a couple years until any decision will be taken on the
matter. For more information you are welcome to contacts us at Askja Energy directly with your
inquiries.
Icelandic Electricity Generation and Transmission
The Icelandic electricity generation capacity and production has more than doubled in a decade.
Today, the total capacity is 2,669 MW. The annual generation 2011 was 17,210 GWh.
ELECTRICITY GENERATION BY SOURCE:
Hydro Power 1,884 MW 12,507 GWh
Geothermal Power 665 MW 4,701 GWh
Fossil Fuels 120 MW 2 GWh
Total 2,669 MW 17,210 GWh
Close to 100% of the electricity generation in Iceland is
produced by harnessing renewable sources.
Hydropower is the largest source with close to 73% of
the annual generation. Geothermal accounts for about
27% of the generation. In addition, there are a few
fossil fuel generating plants.
Several new power stations are under planning (both
hydropower and geothermal power). The most recent
one (now being constructed in South Iceland) will
become operational in late 2013 .
The power stations in Iceland are located all around the
country. The geothermal power plants (marked by red
on the illustration at left) are of course to be found where it is easiest to harness the geothermal
heat for electricity generation. All the main hydropower stations utilize glacial water, flowing from
Iceland’s glaciers.
The largest hydropower system is the Þjórsá and
Tungnaá river system in Southern Iceland (marked
by a large blue dot on the map at left) . However,
Iceland’s largest power station is in the
Northwestern part of the country. This is the 690
MW Fljótsdalur / Kárahnjúkar hydropower plant,
that started operating in 2007 (marked on the map
by the large blue dot north of Vatnajökull Glacier).
The total annual Icelandic electricity generation of
17,210 GWh (17 TWh) makes Iceland one of
Europe’s largest producers of renewable power.

Norway is in a strong first place with its massive
hydropower capacity, generating approximately
120 TWh annually. However, the electricity price
in Iceland is much lower than in Norway or other
European countries. Iceland has no electricity
connections with other countries. Thus, the
generating firms in Iceland do not have access to
the large electricity markets in Northwestern
Europe, where electricity prices tend to be much
higher than in Iceland.
Despite Iceland’s isolated electricity market and
sometimes severe weather conditions, the electricity
supply in Iceland is renown for its reliability (see for
example IMD’s and WEF’s World Competitiveness
reports). This high reliability is the result of Iceland’s
large reservoirs and the solid transmission system,
which is operated by the Icelandic Transmission
System Operator or TSO (Landsnet). The TSO
connects all the large power stations to the Icelandic
electrical grid, which runs around the country (all the
nation lives in the lowlands, with the majority located
in Southwestern Iceland).
Strong Icelandic Electricity Growth
The recent growth in electricity generation and transmission in Iceland has been impressive.
Between 2005 and 2010 the Icelandic electricity
generation doubled. It is important to keep in mind
that all this increase was in low cost renewable
generation (mostly hydropower). And remember that
almost 100% of all electricity generated in Iceland
comes from renewable sources (hydro- and
geothermal power).
This rapid increase in Iceland’s green electricity
generation is shown on the histogram at left / above.
Most of the increased production is supplied to new
industries and services. One of the main explanation
behind this growth is the competitive electricity price
Iceland offers.
The abundant natural hydro- and high temperature
geothermal resources make the Icelandic power
industry able to offer electricity at substantially lower prices than for example can be found in any
other European country. Even the present low spot-price for electricity in the USA (due to
extremely low price of natural gas) are no threat to the Icelandic electricity industry. Companies
that need substantial quantity of electricity and wish to operate within the OECD, will hardly find

better long-term agreements than offered at the Icelandic market (43 USD/MWh in 12 year
contracts are being offered by the Icelandic power company Landsvirkjun).
It is expected that demand for Icelandic renewable electricity will grow quite fast over the next few
years. The fact that Iceland still has numerous very competitive unharnessed hydro- and
geothermal options, makes the country an interesting location for all kinds of energy intensive
industries and services. This may for example apply to data centers, aluminum foils production,
several silicon production facilities etc.
When having in mind the probable high growth in Icelandic electricity generation in the
forthcoming years, it is not surprising that Landsnet (the Icelandic Transmission System
Operator; TSO) is considering major investments in the electricity transmission system. The
diagram at left is from Landsnet. It is interesting that
even the major increase in transmission investments
during 2005-2010 is fairly small compared to what
may be expected in the next 10-15 years.
This plan for new transmission projects is not final
yet. But it gives a clear view of the opportunities
Iceland has regarding new and competitive green
energy projects. No other western country enjoys
similar economic possibilities based on 100%
renewable energy.
Landsnet from Strength to Strength
The Icelandic electricity grid is highly modern and extraordinarily reliable and the Icelandic
Transmission System Operator, Landsnet, is world-
renown for its secure electricity supply to its
customers. This fact has been confirmed in
numerous international reports, where Iceland’s
electricity supply is ranked among world’s most
secure (see for example IMD’s and WEF’s World
Competitiveness reports).
Landsnet owns and operates all bulk electricity
transmission lines as well as all main substations in
Iceland. The company is owned by four electricity
generating companies, where the state-owned
power company Landsvirkjun has almost a 65%
share.
The total length of the transmission lines is currently close to 3,200 km. The power flow is
always illustrated in real time on Landsnet’s website. To meet growing demand, the grid is
constantly being developed and maintained at a high standard, which includes rebuilding older
lines and adding new ones. The grid is free of serious bottlenecks and there are no permanent
system constraints in Landsnet’s grid.

Although Iceland is already the world’s largest
electricity producer per capita, the country has
substantial hydro- and geothermal resources
unharnessed. This includes numerous very
economical options, with minimum environmental
effects.
According to a special governmental plan for energy
(Master Plan for Hydro and Geothermal Energy
Resources) several new renewable energy projects can
be expected in Iceland in the forthcoming years. This will call for major investments, not only in
electricity generation but also in the construction of new transmission lines.
Recently, Landsnet introduced its vision or ideas towards strengthening the grid (as shown on the
map above, with the title Next generation grid). However, this is a plan that the company will
develop in full accordance with the Icelandic government and its energy policy. It is expected that
the Icelandic parliament (Alþingi) will soon vote on the Master Plan, making it clear which new
energy- and transmission projects will be emphasized in the coming years.
In addition to the expected build up in the Icelandic
transmission system, a high voltage direct current
cable (HVDC) is currently being considered between
Iceland and Europe. Such a cable would obviously
affect the Icelandic TSO. In early July (2012) the
Icelandic Minister for Industry, Ms. Oddný
Harðardóttir, appointed a working group to scrutinize
the feasibility of such a interconnection. Of course
Landsnet has a representative in this group, which
will look carefully at all the relevant issues, such as the
technical, financial, legal and social aspects.
However, the next major step for Landsnet is not
regarding the transmission system, but has to do with the electricity market. Within a couple of
months, Landnet will be establishing a new efficient electronic market for electricity trading. We
at Askja Energy will soon be taking a closer look at this new Icelandic electricity market, that will
have strong similarities to for example the Elbas Intraday Market at Nord Pool Spot.

NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Your partner in Energy Services
Khaled Malallah Al Awadi,
MSc. & BSc. Mechanical Engineering (HON), USA
ASME member since 1995
Emarat member since 1990
Energy Services & Consultants
Mobile : +97150-4822502
khalid_malallah@emarat.ae
khdmohd@hotmail.com
Khaled Al Awadi is a UAE National with a total of 24 yearsKhaled Al Awadi is a UAE National with a total of 24 yearsKhaled Al Awadi is a UAE National with a total of 24 yearsKhaled Al Awadi is a UAE National with a total of 24 years of experience in theof experience in theof experience in theof experience in the Oil & Gas sector. Currently working asOil & Gas sector. Currently working asOil & Gas sector. Currently working asOil & Gas sector. Currently working as
Technical Affairs Specialist for EmiraTechnical Affairs Specialist for EmiraTechnical Affairs Specialist for EmiraTechnical Affairs Specialist for Emirates General Petroleum Corp. “Emarat“ with external voluntary Energy consultation fortes General Petroleum Corp. “Emarat“ with external voluntary Energy consultation fortes General Petroleum Corp. “Emarat“ with external voluntary Energy consultation fortes General Petroleum Corp. “Emarat“ with external voluntary Energy consultation for
the GCC area via Hawk Energy Service as a UAE operations base , Most of the experience were spent as the Gas Operationsthe GCC area via Hawk Energy Service as a UAE operations base , Most of the experience were spent as the Gas Operationsthe GCC area via Hawk Energy Service as a UAE operations base , Most of the experience were spent as the Gas Operationsthe GCC area via Hawk Energy Service as a UAE operations base , Most of the experience were spent as the Gas Operations
Manager in Emarat , responsible for Emarat GManager in Emarat , responsible for Emarat GManager in Emarat , responsible for Emarat GManager in Emarat , responsible for Emarat Gas Pipeline Network Facility & gas compressor stations . Through the years , he has developedas Pipeline Network Facility & gas compressor stations . Through the years , he has developedas Pipeline Network Facility & gas compressor stations . Through the years , he has developedas Pipeline Network Facility & gas compressor stations . Through the years , he has developed
great experiences in the designing & constructinggreat experiences in the designing & constructinggreat experiences in the designing & constructinggreat experiences in the designing & constructing of gas pipelines, gas metering & regulating stations and in the engineering of supplyof gas pipelines, gas metering & regulating stations and in the engineering of supplyof gas pipelines, gas metering & regulating stations and in the engineering of supplyof gas pipelines, gas metering & regulating stations and in the engineering of supply
routes. Many years wereroutes. Many years wereroutes. Many years wereroutes. Many years were spentspentspentspent drafting, & compiling gas transportation , operation & maintenance agreements along with many MOUs fordrafting, & compiling gas transportation , operation & maintenance agreements along with many MOUs fordrafting, & compiling gas transportation , operation & maintenance agreements along with many MOUs fordrafting, & compiling gas transportation , operation & maintenance agreements along with many MOUs for
the local authorities. He has become a reference for many of the Oil & Gas Conferences held in the UAE andthe local authorities. He has become a reference for many of the Oil & Gas Conferences held in the UAE andthe local authorities. He has become a reference for many of the Oil & Gas Conferences held in the UAE andthe local authorities. He has become a reference for many of the Oil & Gas Conferences held in the UAE and Energy program broadcastedEnergy program broadcastedEnergy program broadcastedEnergy program broadcasted
internationallyinternationallyinternationallyinternationally , via GCC leading satellite, via GCC leading satellite, via GCC leading satellite, via GCC leading satellite ChannelsChannelsChannelsChannels ....
NewBase : For discussion or further details on the news above you may contact us on +971504822502 , Dubai , UAE
NewBase 29 January 2014 K. Al Awadi

New base special 29 january 2014

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