The Green Challenge.
Distinguished guests,
In the modern world, almost everything we do has some connection to energy and I dare say that all of us take it for granted to have access to electricity to power number of different machines and equipments both in our homes and at work. The problem is that electricity production in many countries requires the use of fossil fuel for the production. And the use of fossil fuel causes CO2 emission affecting the climate.
The challenge we are facing regarding global warming is enormous. If we are to have any possibilities to succeed we have to think green. That´s why we talk of the green challenge and green energy. The energy sector will have to play a crucial role in tackling climate change.
Here in Iceland we have succeeded in doing what many consider impossible; that is to transform our energy systems from fossils fuel to clean energy. To achieve this we relied on our to our green and renewable sources of energy, both hydro and geothermal.
Today, virtually all electricity in Iceland – 99,95 % to be precise - is produced by harnessing hydro- and geothermal power. We also use those resources – mostly the geothermal - to cover about 99% of our space heating requirements. Only about 20% of our total energy needs are met by imported energy, mostly in the form of oil and petrol, for the fishing fleet and the transport sector. In the international context this situation is almost unique and of that we are proud.
About 90% of all houses here in Iceland are heated with geothermal energy by district heating, and most of the district heating systems are owned and operated by the municipalities.
In 1930, a school here in Reykjavik was the first house to be connected to the municipal district heating grid, but in the time to come most of the houses in Reykjavik were connected to the grid, a process greatly accelerated by the global oil crises of the early 1970s in an effort to use indigenous energy resources instead of expensive imported oil.
Using geothermal water for house heating has not only been beneficial economically but has also greatly improved air quality and thus the quality of life. And it is also of importance; in fact of great importance in the climate context, that if the houses in Iceland would be heated with fossil fuels instead of geothermal, our CO2 emission today would be up to 45% higher than it is.
By harnessing our geothermal recourses; we have built up a great team of experts in that field and our experts have been involved in projects all around the world where the purpose is to harness geothermal energy, both to produce electricity as well as building geothermal district heating. For example Icelandic companies have been involved in building one of the world’s biggest districts heating system in the city of Xianyang (Sjanjang) in China.
The district heating system in Xianyang has reduced the city’s reliance on fossil fuels, recued CO2 emission in the city and increased the air quality.
As I mentioned before the oil crisis around 1970 speeded up the transition from fossil fuel to geothermal energy for space heating. The economic difficulties facing us today could have the same effect regarding the transport sector. The Government has already started to work on a comprehensive energy strategy, where the aim is to reduce the reliance on imported fossil fuel for transportation and the fishing fleet by focusing on using renewable energy sources instead.
We are looking into means to support a more sustainable and energy efficient transportation in co-operation with local authorities and municipalities.
Increased energy efficiency and the transition from fossil fuel to renewable energy resources requires research and innovation. Research and development within exisiting companies and the focus on supporting the start-up of innovative companies is a cornerstone of our employment policy. We are not only focusing on our energy resources but also our human resources.
These resources come together in the large ICT projects involving large scale data centres or server farms here in Iceland.
It is obvious that the ICT sector is planning to step up the energy efficiency of its products and services, but probably the largest influence the ICT’s will have is to enabling energy efficiencies in other sectors, an opportunity that could deliver carbon savings five times larger than the total emissions from the entire ICT sector in 2020.
Economically we Icelanders face an enormous task as I am sure you are all aware of. The Icelandic banking system collapsed last autumn in the wake of the global financial crisis. As a we expect Gross Domestic Product to contract by 10.6% this year. Unemployment is of now major concern.
The government has responded with measures according to an economic plan that was put forward in November 2008, in consultation with the International Monetary Fund. The objective of the plan is to restore the banking system, reopen the foreign exchange market and ensure the stability of Treasury finances.
We are reaching some important milestones this summer and are optimistic that the next phase will run smoothly enabling us to recover rather quickly with economic growth measuring at 5% in 2011.
I have the privilege of serving as minister of industry, energy and tourism which is sometimes referred to as the ministry of opportunities these days.
We all know that the only sure way out of an economic crisis is by creating value and export revenues. I firmly believe that our sources of energy, expertise in this field and innovation will mark our way out of the current situation.
Many people are worried that the current world wide economic crisis will result in less environmental awareness and the retreat of the so called "green values". Here in Iceland we believe that the crisis will give birth to the green economy.
Despite Iceland´s damaged reputation in the financial world we have discovered that our reputation in the field of renewable energy and its utilisation is intact. We have been approached by several foreign companies interested in green field projects in Iceland, based on our energy resources. Many of these projects involve using our green energy for operations aimed at diminishing the need for fossil fuels, e.g. by producing silicon for solar panels or by running more eco friendly server farms.
Foreign direct investment in Iceland is of enormous importance to us right now; as a needed stimulus for the economy, as means to increase employment and as a vote of confidence in our
Sometimes we might think that we have reach the end of new inventions, but I‘m sure that that is not the case. In that context it is interesting to read about the director of the USA patent office who was suggested that the office should be closed downbecause everything that could be invented and patented had already been invented. That was 1875.
Fortunately this director was a bit off the mark. And I am confident that with the aid of innovation and new technology we will manage to reduce our CO2 footprint and live in more sustainable way in greener cities, not only in Europe, but in the whole world.