Energy supply, climat change and the role of Iceland.


Dear friends, it’s good to see you here in Iceland and nice being with you again. I had several good years with you in this prestigious assembly, and even serving on this committee with several of you, among other both the chair- and vicechairmen who remain my good friends.

In my new capacity as Minister of Industry and Energy I am going to touch on some topics concerning energy supply and climate change, with special reference to the Icelandic situation.

I believe, the energy risks for my country reflect the risks for the Arctic , that as we know is the most fragile part of the world´s ecosystem, the one at greatest risk, and the one that takes longest to heal in case of environmental accidents.

I also happen to believe, that in terms of energy innovation, in terms of green energy, Iceland can serve as a positive example – esp. to the developing countries. Iceland has something special to contribute in terms of it´s unique experience and expertice in geothermal technology.

Let us, however, start with global issues. A modern society can not function without energy. It is therefore of paramount importance that citizens and businesses have access to secure and affordable energy. Disruption in the flow of energy or fluctuations in prices can have enormous economical and thus social consequences. Unfortunately, the likelihood of such disruptions seems to be increasing. Changes in global demand, increased dependence on fossil fuel, fears that the peak in oil production may be approaching or even past, the threat of terrorism and natural disasters – all these factors are already affecting us.

They are reflected in our daily lives by ever increasing energy prices. They have already have lead to competition if not conflicts over resources. Add to that the issue of climate change and it is clear that the situation could develope gravely for many countries and regions. It is therefore not surprising that energy security is high on the political agenda, and has on several occasions been raised at meetings og Nato.

As already stated, we probably are fast approaching the limits of finding more of the conventional carbon-hydrate resources. Of course, there are still new fields to be developed. We know there are vast reserves of oil in the high Arctic, the USA Energy Authorities have stated just recently that huge potential is on and off the coast of East-Greenland, and here in Iceland we are now certain that there are potientially rich oil-fields in the northernmost parts of the Icelandic economic zone.

All these areas will be harvested, and of course, in due course they, like any other oil-fields, will finally run to an end. The core issue obviously is therefore to reduce our dependence on carbon-rich fuel, which increasingly has to be imported to our part of the world. Our only viable options into the future are, therefore, basically the following:

Firstly, better energy efficiency, preferably leading to a considerable reduction in our energy needs. Secondly, and perhaps most vitally, innovations and technical break-throughs that will lead to the use of more and diverse renewable resources of all kinds. Thirdly, the development of new technology related to carbon sequestration, as already being experimented with in several places. In Iceland , for example, our geothermal companies and university faculties have started promising experiments with several leading American Universities on this matter, where CO2 is put in contact with basaltic layers deep in the earth, and changed into quartz by chemical reaction.

Fourthly, in connexion with the carbon sequestration it is a desirable option to develop clean coal- technology in order to enable us to utilize the vast coal and unconventional fuel resources in some of our member states - with due respect to the atmosphere.

In the fifth place – but not to my liking - some countries want to increase the use of nuclear energy. That as you know is a highly charged and controversial issue.

Let me now turn to the energy situation in Iceland and what lessons we can draw from it for the world at large. Our situation is actually quite different from most other countries. We are by nature blessed by relatively huge renewable energy- resources, both hydro and geothermal.

At the end of World War 2 Iceland was as dependent on oil as any other western country. However, in the lifetime of only one generation we have managed to change from being largely an oil-dependent economy to being able to meet over 70% of our energy needs by clean, green energy. Today, virtually all electricity is produced from hydro and geothermal. We also use those resources to cover about 98% of our space heating requirements. Only approximately 30% of the energy need are met by imported energy, mostly in the form of oil and petrol. The oil consumption is mainly limited to fisheries and the transport sector.

The Government has pinpointed those sectors as a priority. It has a manifested policy to have developed alternative fuel for both sectors at the middle of the century, in the form of hydrogen, as well as methanol produced from emission from large smelters.

Iceland therefore strives to become the first really green economy in the world – and as I have explained that is quite a a realistic goal in relation to our past.

Our experience and technology in green energy begs the question from someone in the audence: Could Iceland have a role to play in energy-security on world level or in the context of NATO concerns? I believe that in spite of our smallness we could. In some ways, we already do. Let me explain to you how.

Of our annual production of electricity (16 TWh) more than three quarters are used by the power-intensive industry, producing mainly aluminium for the rest of the world to use. This is an intensive industry that is being driven by green energy.

One can define it as a practical way of exporting our green energy. From that angle, it is even possible to argue that Iceland is currently exporting more energy units than we are importing in the form of fossil fuels, and thus, might stake a claim to already being net exporter of energy.

However, it is in another field, where I believe Iceland really can and has a moral duty to contribute to the production of green energy on a much larger scale than we already do.

We are a self-proclaimed geothermal nation. I state without any reservation that the Icelanders are today the world´s leading experts in the utilisation of geothermal energy. They posess not only state-of the art, but wield a breaking-edge technology on all fronts geothermal.

In Iceland we have the longest and the best track record in the use of geothermal energy, stretching back almost a century although production of electricity by geothermal means has only really taken off in the last decade or so.

We also have the strongest geothermal energy companies.

We probably possess the largest pool of educated talent or man-power in this particular field, the worlds most experienced geothermal drilling company is Icelandic and already operating around the globe, and presently we are developing a truly break-through technology that may enable to harness much greater energy from the geothermal fields than has been possible to date.

You may well ask: What has that to do with the rest of the world? Isn´t Iceland a volcanic island, and are there any geothermal fields to be harnessed in other parts of the world?

The answer is a simple but firm yes.

The truth is, that there are vast untapped geothermal resources in most parts of the world. In at least 140 countries geothermal energy is to be found in some form or other. Conventionally, geothermal energy is to be found on the boundaries of tectonic plates on the earths surface, where there usually is ample – in fact often too much - volcanic acitivity to be found. One such plate boundary crosses Iceland right beneath our feet and runs in fact along the whole of the Atlantic.

The conventional method, perfected in Iceland , but also used in several other countries, is to drill 2-3 km. deep holes into the ground, to extract steam to generate power in turbines, and then use the hot water for space heating.

However, in Iceland we are presently also beginning on new break-through technique, that is based on the so-called "deep-drilling." This entails drilling down to 5-6 kilometers depth, close to magmatic intrusions, where scientists literally try to capture the energy in molten lava deep in the earths crust. The water at this depth can be described as being much more powerful, it is in a stage called supercritical, as it is under a huge pressure at a very high temperature. This enhances the yield in terms of power from each borehole 5-10 times as compared to the traditional technology. Clearly this opens up unique, new possibilities, and may enable us to produce vastly greater amounts of power from existing fields than before.

An added bonus is the fact, that one doesn´t need volcanic zones to be able to use the deep-drilling techniques for production of geothermal power. In places, for example, where the continental plates are thrust against each other, one may encounter thermal gradient due to the pressure of converging plates, that is also possible to harness by the break-through deep-drilling techniques.

A kind of example is the south part of Germany, where Icelandic companies are starting to use these possibilities to produce green electricity. A recent MIT-report on these possibilities in the USA shows that by these methods geothermal energy could supply close to 10% of the total electricity needs of the USA . I add, that Iceland and USA under the auspices of the respective energy ministers are presently planning a cooperation on deep-drilling in our countries. Another potent example is Indonesia , the worlds largest geothermal reservois. Indonesia has an estimated potential of 30 thousand geothermal MW and could in theory meet all her energy needs if the deep-drilling technology would be applied.

Iceland has in addition made a significant contribution to transfer technology from its geothermal industry to the developing countries by operating since 1978 a Geothermal Training Programme in Iceland as a section of the United Nations University. There we offer specialized training in all the major topics related to the exploration and utilization of geothermal energy, including environmental aspects.

As a result, in many countries in Africa , Asia , Central America and Central and Eastern Europe , graduates from the UN University in Iceland are among the leading specialists in geothermal research and development. They have been very successful, and have contributed significantly to energy development in their parts of the world.

To sum up:

The story of Iceland transforming itself from an underdeveloped country into a modern high-income welfare state in a relatively short period of time is closely related to our utilization of renewable energy sources.

The reversal of the Icelandic economy from dependence of oil to green, sustainable energy economy in a relatively short period of time can serve as a show-case and a potent example for a great many countries in the world, not least the developing nations with access to geothermal power.

The projected participation of Icelandic energy firms in the transfer of geothermal technology can not only enhance prosperity and stability in third world countries but also increase security by saturating – directly or indirectly - some of the growing energy needs in many NATO-countries.

It is my firm belive that in the face of looming climatic problems, Iceland can and should contribute far beyond its size to reverse the global climatic changes and our biggest contribution could be the export of our knowledge and experience in geothermal energy.

It is therefore the declared policy of our new government to export our geothermal prowess and this was clearly manifested in its policy statement from the beginning.

To achieve that aim, Iceland has established a highly unique cooperation between governmental institutes, our strongest private and public energy companies with huge injection of both public and private capital coming on one hand from the wealthy public energy companies and private international banks and financial institutions, both outside and inside Iceland.

We are currently investing and transferring our technology in this field to countries as diverse as Indonesia, China, Russia, the Philippines, Indonesia, El Salvador, Slovenia, and also in countries such as Germany and the United States. On my desk in the Ministry of Industry I have requests from over 30 countries for technical assistance, cooperation and investments in relation to green energy.

I have in my short speech outlined the Icelandic position, and how we can – and are going to - contribute to the rest of the world in the fight against global warming.

I hope you will enjoy your stay in Reykjavík and I wish you all the best and great results from this conference.