Think GEOENERGY Magazine - Issue 02 2014 Preview

GLOBAL GEOTHERMAL ENERGY – AFFAIRS | BUSINESS | DEVELOPMENT | ENGINEERING | FINANCE

ISSUE 02 APRIL 2014

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COUNTRY FOCUS: ICELAND

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AFFAIRS

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DEVELOPMENT

Associations and industry clusters, the World Geothermal Congress and the Mexican Geothermal Center

Kick-starting geothermal development in Latin America through new policies and risk mitigation efforts

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BUSINESS

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ENGINEERING

Blue Lagoon as successful model for geothermal spas, and binary plants as reliable power solutions

Improving exploration to reduce risk, geothermal education, wellhead power plants, and database projects in the U.S.

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COUNTRY FOCUS

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FINANCE

Focus on Iceland, a role model for the utilization of geothermal energy beyond power generation

Merger and acquisition trends within the geothermal industry

THINK GEOENERGY MAGAZINE

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Issue 02 2014

Issue 02 2014

THINK GEOENERGY MAGAZINE

Think GEOENERGY Magazine Editor Alexander Richter Managing Editor Haraldur Unason Diego

ALEXANDER RICHTER Founder & Principal, ThinkGeoEnergy

Director of Production Gudmundur St. Sigurdsson Design Linde Richter

From the editor Launching a magazine was a big step for ThinkGeoEnergy: magazine publication is a risky business in the digital age. However, our venture has been rewarded with constructive and positive feedback and, because of that, you are now reading the second issue of Think GEOENERGY Magazine.

Layout Bratislav Ðikic´ Contact magazine@thinkgeoenergy.com magazine.thinkgeoenergy.com

It is with great pride that we focus this month on the magazine’s country of origin, Iceland. This North Atlantic island state stands like no other country for the great and varied uses of geothermal energy. With outdoor swimming pools open year-round and district heating for nearly all households, the country has also creatively added geothermal to a variety of industrial activities, and naturally also derives power - about a third of its electricity production - from its several geothermal plants.

The geothermal industry is global, as reflected in our content, which is derived from the farthest corners of the world.

Address ThinkGeoEnergy ehf.

Grensásvegur 9 105 Reykjavik Iceland Publisher ThinkGeoEnergy ehf. in cooperation with Flugmálaútgáfan.

The Affairs section reports on the efforts of the Canadian Geothermal Energy Association to move the industry forward; the newly established Mexican Geothermal Center; and the upcoming World Geothermal Congress, taking place in April 2015 in Melbourne, Australia, which has become the industry’s largest gathering. Held every five years, the event brings together people from the research and education communities, as well as all segments of the industry from across the world. The Congress will also be an important showcase, and a way to position the industry for the near future following challenging years, particularly in Australia.

The stimulation of development activities in Latin America is the topic of our Development section.

The Engineering section receives extra space in this issue. It features an article on how better exploration could aid development, and an overview of geothermal education in Iceland. We also take a look at the possible role of wellhead geothermal plants in bringing power online faster. The effort in the U.S. to collect geothermal data and maps and collate them all in a national database is a feat in itself and, for other states with such resources, a worthy endeavor to copy.

In the making of a magazine like this, there are many willing people who have contributed articles and other content. To all those who have helped us along the way, a very heartfelt thank you. We aim to provide timely, relevant and interesting content for the industry, and we appreciate your cooperation and welcome your suggestions for interesting stories, or even articles for publication. Be sure to order your subscription at www.magazine. thinkgeoenergy.com so you don’t miss out on an issue.

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ISSUE 02 APRIL 2014

In the Business section, Ormat Technologies reveals how their binary systems have been able to withstand natural disasters. We also investigate how the success of the Blue Lagoon has made it a model for geothermal spa operations around the world.

GLOBAL GEOTHERMAL ENERGY – AFFAIRS | BUSINESS | DEVELOPMENT | ENGINEERING | FINANCE

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COUNTRY FOCUS: ICELAND

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AFFAIRS

D

DEVELOPMENT

Associations and industry clusters, the World Geothermal Congress and the Mexican Geothermal Center

Kick-starting geothermal development in Latin America through new policies and risk mitigation efforts

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BUSINESS

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ENGINEERING

Blue Lagoon as successful model for geothermal spas, and binary plants as reliable power solutions

Improving exploration to reduce risk, geothermal education, wellhead power plants, and database projects in the U.S.

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COUNTRY FOCUS

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FINANCE

Focus on Iceland, a role model for the utilization of geothermal energy beyond power generation

Merger and acquisition trends within the geothermal industry

Cover for Issue 2: 01 Geothermal wellhead, Iceland (Picture: Lydur Skulason (C) CC BY 2.0) 02 Blue Lagoon, Iceland (Picture: Blue Lagoon) 03 Iceland Satellite Image (Picture: NASA (C) CC SA 3.0)

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Issue 02 2014

THINK GEOENERGY MAGAZINE

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A FFA IRS

06 | DIFFERENT INTEREST GROUPS FOR GEOTHERMAL The power of collaboration in Iceland is promising

08 | THE WORLD GEOTHERMAL CONGRESS

2015 will be a great year for Geothermal – especially in Melbourne, Australia

09 | PROMOTING GEOTHERMAL ENERGY DEVELOPMENT IN CANADA

Interview with Alison Thompson, Chair of the Canadian Geothermal Energy Association

12 | UNITY STRENGTHENS – MEXICAN CENTER FOR INNOVATION IN GEOTHERMAL ENERGY Mexican innovation center founded to accelerate and promote development

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38 | GEOTHERMAL APPLICATIONS IN ICELAND – IT ALL BEGAN WITH DISTRICT HEATING Brilliant, innovative industrial applications are changing the game

42 | ICELANDIC GEOTHERMAL PLANTS AND OUTLOOK

Infographic description of the current status and how things might look in the future

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DEV ELOPMEN T

45 | KICK-STARTING GEOTHERMAL DEVELOPMENT IN LATIN AMERICA

Promising initiatives in Latin America mark a geothermal renaissance in the region

BUSINE SS

16 | BINARY GEOTHERMAL – A RELIABLE POWER SOLUTION DURING NATURAL DISASTERS

Heidi Bethel, from Ormat Technologies, tells the success story of binary power plants during disasters

48 | GEOTHERMAL EDUCATION IN ICELAND

Accumulated expert knowledge of geothermal utilization has been shared for more than 35 years

52 | DRILLING INTO MAGMA

The Iceland Deep Drilling Project targeting supercritical geothermal fluids

20 | ACCIDENTAL CREATION OF A SUCCESSFUL GEOTHERMAL SIDE BUSINESS

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22 | GEOTHERMAL DRILLING EXPERTS FOR HIRE

53 | BETTER EXPLORATION IS NEEDED TO REDUCE RESOURCE DEVELOPMENT RISK

The Blue Lagoon has become a raging success – first by accident and then by design

ENGINEER ING

How North Tech Energy is building its business

Jeff Witter explains why it is crucial to improve exploration for geothermal resources

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56 | GEOTHERMAL DRILLING COUN TRY FOCUS

Iceland GeoSurvey (ÍSOR) is a leading consulting and research institute

24 | COUNTRY FOCUS ON ICELAND

58 | FASTER RETURNS WITH MODULAR GEOTHERMAL WELLHEAD POWER PLANTS

26 | A SHORT HISTORY OF GEOTHERMAL IN ICELAND

62 | A TRANSPARENT LANDSCAPE

With years of experience, Iceland has created a unique geothermal energy industry Parker O’Halloran recaps how things were done

28 | THE DOMINANT ROLE OF GEOTHERMAL IN ICELAND’S ENERGY SUPPLY

Geothermal energy plays a crucial role, especially for heating and power

32 | GOVERNMENT POLICY & FRAMEWORK

Ágústa Ýr Thorbergsdóttir provides an overview of the legal system

34 | GEOTHERMAL RESOURCES AND POTENTIAL

Prolific volcanic activity provides an abundance of geothermal resources

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Parker O’Halloran says modular wellhead power plants may be the future of geothermal Arlene Anderson explains how the U.S. National Geothermal Data System is reducing the risk associated with geothermal exploration

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65 | GEOTHERMAL M&A TRENDS – BASELOAD POWER GENERATION VIA THE JUNIOR RESOURCE DEVELOPMENT MODEL

Food for thought from Aaron Libbey and Daniel Resnick of Adage Ventures Inc.

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AFFAIRS

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Issue 02 2014

AFFAIRS

A Different Interest Groups for Geothermal By: Alexander Richter, ThinkGeoEnergy

In a collaborative approach, various groups represent the different interests of the Icelandic geothermal sector.

The geothermal energy sector is comprised of different interest groups.

They include a research and development focused academic side, an engineering and service side, as well as the interests of energy providers, the public and authorities.

To strengthen the sector and represent it on both national and international levels, various groups were established to collaborate on business development, strengthening competitiveness and promoting Icelandic geothermal know-how internationally.

Geothermal Association of Iceland The Geothermal Association of Iceland (Jarðhitafélag Íslands) was founded in 2000 and now has more than 100 members in its ranks. They include companies, agencies and organizations, and individuals that work directly and indirectly with geothermal energy.

With a primary focus on promoting the activities of Iceland’s players in the geothermal energy space, the Association encourages discussion about matters relating to geothermal energy and its utilization. But the Association also sees itself as a driver of cooperation between the different geothermal stakeholders in Iceland.

The Association also represents Icelandic interests in international organizations, such as the International Geothermal Association, and 06 www.thinkgeoenergy.com

1 cooperates internationally with other organizations on geothermal topics.

In regular informational meetings, the Association introduces and discusses several topics of interest to the Icelandic geothermal community. These can be related to legal issues in development, technological development, or other research and development topics.

Iceland Geothermal Cluster In 2009, a private company started work on a geothermal cluster initiative for Iceland and performed an analysis of the Icelandic geothermal sector, together with Dr. Michael Porter, considered by many as the founder of business clusters, and Dr. Christian Ketels, both of Harvard Business School. Industry stakeholders were also involved in the mapping of the cluster.

01 View over Reykjavik, Iceland (Picture: Hugh Gallagher (c) CC BY 2.0) 02 Iceland Geothermal Conference 2013 (Picture: Iceland Geothermal Cluster) 03 Svartsengi plant and Blue Lagoon, Iceland (Picture: Vestman, (c) CC BY 2.0) 04 Visit to Hellisheidi plant (Picture: Iceland Geothermal Cluster)

Iceland, as well as increasing the export of Icelandic know-how in the form of goods and services.

The Iceland Geothermal Cluster aims to “stimulate competitiveness within the industry, add value to the sector and improve the utilization of Iceland’s geothermal resources.”

As in other countries, a lack of domestic development has compelled the Icelandic geothermal sector to look for opportunities abroad. It is not surprising, therefore, that the Cluster and its members are investigating efforts to streamline the international marketing of Icelandic geothermal know-how and increase the sector’s competitiveness in the international context.

That initiative led to the formation, in 2013, of Iceland Geothermal – an industry-driven cluster cooperation. With 43 founding members, the initiative now counts 50-60 members representing companies, associations and institutions that belong to the Icelandic geothermal sector. The cluster’s focus is also to facilitate investment in geothermal energy related projects and businesses in

In the spring of 2013, the Cluster initiative held the international Iceland Geothermal Conference, which brought together 600 participants from around the world to discuss, among other things, effective exploration methods and maximizing utilization of geothermal energy, and to explore ways of realizing geothermal projects with less risk and higher profitability.

Issue 02 2014

AFFAIRS

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4 Not only did the conference provide a great showcase for the Icelandic geothermal sector; it also allowed for discussions about international collaboration to increase geothermal development worldwide. The conference will be held at three-year intervals, the next one due in the spring of 2016.

Most members of the Cluster initiative are also members of the Geothermal Association of Iceland and there are many cross-connections between the two organizations’ activities and events. The Association officially supports and collaborates on the Iceland Geothermal Cluster.

GEORG – Geothermal Research Group GEORG is best described as the research and development element of the Icelandic geothermal sector. It represents Icelandic as well as international organizations and companies. GEORG’s main mission is to enhance research into geothermal resources and their sustainable development. As described on its website, its goal is “to create a critical mass of joint resources and efforts to break through existing scientific and technical barriers to innovation in the field, and increase significantly the number of qualified experts in geothermal research, engineering, design and technical exploitation of the resource.”

GEORG is therefore seen as a research-driven cluster, while Iceland Geothermal is more industry driven.

Both clusters cooperate on a variety of projects and events. GEORG’s supporting partners are, among others, the Icelandic universities and academic programs with some geothermal content, as well as engineering firms – both Icelandic and international.

GEORG and Iceland Geothermal are also cooperating on a new startup accelerator program called Startup Energy Reykjavik, initiated in the spring of 2014. - AR

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Issue 02 2014

AFFAIRS

The World Geothermal Congress

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The Largest Geothermal Industry Gathering By: Roland Horne, International Geothermal Association (IGA) Held every five years, the World Geothermal Congress 2015 in Melbourne, Australia, will bring together the global geothermal industry The World Geothermal Congress 2015 will be held in Melbourne, with field trips in New Zealand and Australia.

Organization for WGC2015 is already well under way, with a large number of volunteers and professional staff active in the planning and preparation. The congress will be held at the Melbourne Convention Center, a magnificent venue on the banks of the Yarra River, close to Melbourne’s city center. The facility has many suitable meeting rooms for technical and business sessions, along with a large exhibition space. Although the number of sessions has yet to be determined, the venue itself has the capacity to hold ten parallel technical sessions – the same number as took place at WGC2010 in Bali. In July 2013 the website was opened to the submission of abstracts, and 1783 abstracts have been submitted thus far – about 40% more than in 2010 in Bali. The WGC2015 is going to be BIG!

In 2010, all the exhibition spaces were sold out in advance of the Congress.

In 2015 in Melbourne, the venue is much larger and accommodates a substantial number of exhibits, including tall space and vehicles.

One of the requirements of the technical program is to review and edit a very large number of papers. In 2010, more than 140 reviewers participated in the creation of the technical program, and many of them served as session chairs at the congress itself. For WGC2015, more than 180 volunteers are already hard at work reviewing abstracts (abstract reviews are due at the end of March, and accepted papers will be due in May).

The World Geothermal Congress is a unique opportunity to gather the worldwide geothermal community and join in discussion of progress and obstacles in the development

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of the planet’s geothermal resources. Past congresses have been very well attended, and have resulted in the creation of a large body of technical literature (all available for download at the IGA website). In 2010, the WGC in Bali had 1050 technical papers; at WGC2015 we may have as many as 1500.

One very important activity is the collation of Country Updates, which allows for the assembly of a worldwide inventory of geothermal developments. The WGC updates are widely used to understand the current status of geothermal development activity worldwide. IGA is grateful that this initiative will be led once again by Prof. John Lund from the Oregon Institute of Technology, who has a great deal of experience in this regard.

Given that IGA is the global “association of associations”

01 Opening of World Geothermal Congress 2010 (source: ThinkGeoEnergy) 02 Melbourne City Skyline (Picture: Long Zheng (C) CC BY-SA 2.0) 03 Logo of WGC 2015 Melbourne (source: WGC 2015 Organising Committee)

it is in a position to make this planetary inventory a reality.

The congress organizers are actively seeking financial support from national and international agencies and companies to help provide fellowship funding to attendees from developing countries. Our hope is to make WGC2015 accessible to as many people as possible, with a special objective of reaching participants from countries that may not be able to afford to send delegates, but that may benefit from adding geothermal energy to their national energy portfolio.

In 2010 approximately 300 fellowships were awarded, providing partial support for the attendees’ travel and registration costs. If you are aware of organizations that may be willing to assist with financial support, please encourage them to participate. - RH

Issue 02 2014

BUSINESS

B Binary Geothermal

A Reliable Power Solution during Natural Disasters By: Heidi Bethel, Ormat Technologies Natural disasters are devastating for their potential and actual effect on local power generation, but binary geothermal plants provide a reliable power solution during and after disasters.

What do the typhoon that ravaged the Philippines in 2013 and the 2010 eruption of Mount Pacaya in Guatemala have in common? Both these events were devastating to the areas in which they occurred and, more specifically, severely handicapped electricity production. In addition, both these areas host binary geothermal power plants. During those distressing times, other means of power supply were rendered incapable while the binary geothermal facilities suffered minimal damage and were able to provide a dependable energy source for grid support.

The benefits of these binary geothermal power plants over other power supplies were well recognized during and after these natural disasters, enabling rapid provision of recovery power.

Powering the Philippines The Energy Development Corp. (EDC) recently announced the rehabilitation of several traditional, steam turbine-based geothermal power plants following 16 www.thinkgeoenergy.com

severe damage by Typhoon Haiyan (known as Typhoon Yolanda in the Philippines), which hit the shores of Leyte in November 2013.

In all, 600 megawatts (MW) of geothermal capacity was disabled following the biggest storm ever reported to hit the Philippines. While the world rushed to provide humanitarian aid in the following weeks, there was some relief to the grid from the Upper Mahiao binary geothermal power plant, which was able to provide electricity when no other power supply, renewable or not, was available.

“As the only power source available to the island of Leyte, these binary geothermal power plants proved their value and aided recovery,” said Yoram Bronicki, Chief Operating Officer and President of Ormat. “While many elements contributed to the availability of the Upper Mahiao plant, perhaps the most apparent is the relatively small footprint compared with that of a traditional steam turbine facility and, more importantly, the binary design.”

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How it works…

8The fluid is extracted from an underground reservoir and flows from the wellhead through pipelines to heat exchangers in the ORMAT® ENERGY CONVERTER (OEC) 8Inside the heat exchangers, the geothermal fluid heats and vaporizes a secondary working fluid, an organic fluid with a low boiling point 8The organic vapors drive the turbine and are then condensed in a condenser, which is cooled by air or water 8The turbine rotates the generator 8The condensed fluid is recycled back into the heat exchangers by a pump, completing the cycle within the closed system 8The cooled geothermal fluid is re-injected into the reservoir

Issue 02 2014

BUSINESS

3 01 Blue Lagoon with Svartsengi plant, Iceland (Picture: Vestman, (c) CC BY 2.0) 02, 03 & 04 Blue Lagoon, Iceland (Picture: Blue Lagoon)

4 beginning. Icelandic designer Sigurdur Thorsteinsson, of Design Italia, led Blue Lagoon’s emergence as a brand.

Design and architecture have always been at the forefront of the company’s business model – no small challenge when you are working with the Icelandic landscape, which is comprised mostly of lava. The company has implemented strategic steps to protect the unique experience of visitors to these seemingly otherworldly waters. The availability of online booking helps manage peak times in the summer, while still catering to guests and providing a oncein-a-lifetime lagoon experience. Even in winter time, more and more guests are experiencing the unique nature and beneficial effects of the lagoon’s geothermal seawater, thanks to increasing year-round tourism in Iceland.

Geothermal Health and Skin Care Products Today, Blue Lagoon is perhaps one of the strongest Icelandic brands, and is synonymous with the very concept of what a geothermal spa should be. Furthermore, it has created a strong brand

recognition and reputation in health, wellness, and beauty with its skin care products. The skin care product line is based on the Blue Lagoon’s geothermal seawater and its ingredients: minerals, silica, and algae, harvested using green and sustainable methods in Blue Lagoon’s R&D and Harvesting Center in Svartsengi Resource Park.

The healing effect on psoriasis has been scientifically proven. Studies conducted in cooperation with Professor Jean Krutmann at the Heinrich Heine Institute in Germany show that the Blue Lagoon algae have anti-aging effects and the Blue Lagoon silica strengthens the skin barrier function.

The algae, used exclusively in Blue Lagoon skin care, are grown at the R&D Center using CO2 (effluent gas) from the HS Orka power plant, which signifies a step to reduce the plant’s carbon footprint. Silica, for use at the Blue Lagoon spa, clinic, and as part of the skin care product line, is also produced at the center. The company’s guiding principles have been the sustainable and multiple uses of the byproducts of this geothermal resource.

The first skin care products were designed and produced for the specific needs of people struggling with psoriasis. The Blue Lagoon silica mud mask was among the first products developed and is still one of the company’s most popular. Blue Lagoon now offers a complete line of skin care products that cleanse, boost, and nourish skin, including a highly researched and developed anti-aging facial skin care line. Blue Lagoon operates three specialty Blue Lagoon skin care shops in Iceland; one at Keflavík International Airport, another in Reykjavík city center, and one at the Blue Lagoon. The skin care range is also sold worldwide through the online shop at www.bluelagoon.com.

Blue Lagoon also operates a clinic providing specific psoriasis treatment. The clinic has 15 well appointed and designed hotel rooms. Future plans are in the works to expand the Blue Lagoon spa experience area and construct a new 63-room hotel.

Magnea Gudmundsdottir, Blue Lagoon’s Public Relations Director, says Blue Lagoon’s success will be tough for others to copy. “The Blue Lagoon is unique. It is based on geothermal seawater found only in this location, and therefore cannot be replicated in other parts of the world. Hopefully it can serve as inspiration for others to create valuable new products and services based on geothermal resources as we do at Blue Lagoon, in the Svartsengi Resource Park.” When asked what advice she would give other geothermal spa developers, Gudmundsdottir says it is important to “stay true to their vision and build on what is unique for their site.”

Blue Lagoon also cooperates with other geothermal spas in Iceland, including Nature Baths in Mývatn and Fontana in Laugarvatn, sharing its experience in the building and running of a successful spa operation, and in creating a unique visitor experience.

Blue Lagoon is open year round and is located in Grindavik on the Reykjanes Peninsula, approximately 20 minutes’ drive from Iceland’s international airport and about 45 minutes’ drive from the capital, Reykjavik. - AR www.thinkgeoenergy.com 21

Issue 02 2014

BUSINESS

Geothermal Drilling Experts for Hire Geothermal drilling is a highly specialized business and requires experienced personnel. This is exactly what North Tech Energy has built its business on.

In the Icelandic energy sector, extensive experience has been accumulated by people working on various geothermal projects, within the country and abroad. Qualified people are in great demand in the field and are highly valued. Completion of projects on schedule, on time and within budget requires experts with experience. North Tech Energy (NTE) is a company that specializes in supplying energy companies with flexible and proficient talent for ad-hoc services around the world.

“Knowledge management is at the core of our philosophy,” says Geir B. Hagalinsson, drilling engineer and founder of NTE. “A team is no stronger than its weakest link. With this in mind, we have organized a strong team with an extensive background in all sorts of drilling projects, both on- and offshore, able to refer quickly to the accumulated expertise of all its members.”

Geir, as he prefers to be called, following the Icelandic tradition of predominantly using first names, says the idea of starting a business like NTE has followed him throughout his education at Robert Gordon University, Aberdeen, and during his years working on oil rigs in the North Sea. “Putting the knowledge of high-temperature drilling in Iceland to work elsewhere has been the main challenge for years. We hope we have the solution, based on the idea that it’s all about the people.”

Icelandic Companies as Leaders The great upswing in the use of geothermal energy in developing countries provides plenty of opportunities for experienced technicians from around the world. “Icelandic energy companies are highly respected with regard to exhaustive experience in geothermal,” says Geir. “This type of experience is not easily available on call or on demand for temporary proj22 www.thinkgeoenergy.com

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ects. Our business strategy is based on supplying the right kind of team for drilling projects around the world and being able to provide services throughout the whole process, from quotes to contracting and well designs to drilling supervision.”

Geir believes strongly in good communication and the sharing of knowledge.

“As a close-knit team, we are able to call on each other for discussions or problem-solving at any time. This arrangement ensures that the client always has access to the various expertise and skill-sets within our team.

The network is the key to our success – as well as the client’s.”

Within this team network Geir refers to are specialists in both on- and offshore drilling who have been engaged in all levels of drilling projects; drilling engineer Thoroddur Sigurdsson and the two drilling supervisors; Kristjan Skarphedinsson; and Geir himself. With the geothermal experts out in the field, the management of business development and the team’s undertakings is run by

a dynamic administrative duo, consisting of Runa B. Hagalins, Director of Finance and Marketing, and Arna Hagalins, HR Director. The issue of administrative detail is sometimes overlooked in projects and often perceived as cost center; a necessary evil, perhaps. At North Tech Energy, however, it is considered a value-adding, essential part of the whole operation.

New Frontiers for Drilling Expertise As a number of oil firms prepare for oil and gas exploration in the Dreki Area on the Jan Mayen Ridge, exciting opportunities emerge for drilling specialists. “There is no doubt in our minds that if the exploration phase is fruitful, demand for these kinds of services will soar,” says Geir, adding that preparations for the projected demand are well under way at NTE. “Our mission is to offer a diverse portfolio of talented individuals to engage successfully in complicated projects, whether on- or offshore. Hence, we need to be well prepared and ready to serve when the time comes.” This mission has also required NTE to be on the lookout for

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BUSINESS

01 Geir B. Hagalinsson on drilling supervision, Rwanda 02 Drilling rig in Rwanda 03 Drilling supervisor, Kristjan Skarphedinsson in Rwanda, Africa Pictures by: Helga Margrét Helgadóttir skilled technicians and experts with diverse skill-sets within the industry.

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To be able to provide services for companies operating in the Dreki Area, NTE has taken strategic steps to fulfill the requirements of projects of this nature and size. Registering the company in Aberdeen, Scotland, in December 2013 was one step; applying for full membership of the Recruitment and Employment Confederation (REC) was another.

Subscribing to REC’s quality code advances NTE to the forefront of talent suppliers within the industry and provides assurance of the processes involved in hiring talent, whether temporary or long term. By doing so, NTE’s team hopes to raise standards in the quality of hires and, at the same time, make it more economical for companies to recruit and hire.

Optimism Ensues So far, NTE’s story has been one of success, strengthened by positive feedback from both current and potential clients alike. “The kind of reaction we’ve had builds confidence that we’re on the right track and are providing the right type of services,” says Geir. “We are, of course, nowhere near done with business development, because market demands vary, so we have to be agile and on our toes with regard to constant improvement in training and quality control.”

Within the geothermal field, NTE is working on projects mainly in Asia and Africa. A number of other projects are on the horizon, about which the team is excited. A recent feasibility study undertaken by the company also fosters optimism, but Geir is reluctant to reveal its conclusions. “What I can say is that we’re even more determined in our market approach and feel more confident that our business approach is meeting the market’s demands.” www.thinkgeoenergy.com 23

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COUNTRY FOCUS – ICELAND

C Country Focus

Iceland By: Alexander Richter, ThinkGeoEnergy Endowed with vast geothermal resources due to its geological setting on the rift between the Eurasian and North American Plates, Iceland has created a unique geothermal energy industry.

Geothermal energy has always played an important role for Iceland, affecting the daily life of every inhabitant of this North Atlantic country. Even its capital, Reykjavik, meaning “smoky bay,” is so called because of the geothermal steam noticed by the first settlers as they landed on Iceland’s shores.

No other country’s geothermal utilization matches the scale of Iceland’s, and nowhere does it play such a significant role. Two thirds of the country’s primary energy supply comes from geothermal, of which district heating accounts for the largest part, providing low-cost, green heating to Icelandic households and businesses. What’s more, in01 Svartsengi geothermal plant, Iceland (Picture: ThinkGeoEnergy) 02 Nesjavellir geothermal plant, Iceland (Picture: Edward and Caroline (c) CC BY-SA 2.0)

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novative businesses have been created in what is now known as “cascaded use.”

Run-off water from a geothermal plant sets the scene of the country’s most popular tourist attraction and comprises raw material for a skin care product line. Greenhouses provide Icelanders with fresh vegetables year round, and as Iceland’s President (probably geothermal’s greatest global ambassador) likes to say, it also heats the largest banana plantation north of the Alps. There are even plans to raise a greenhouse to produce tomatoes for export.

The environmental and renewable energy sources of geothermal and hydro have also provided the basis for the economic transformation of a country that, for centuries, depended mostly on fisheries and seafood exports.

Geothermal energy in Iceland - Key facts First geothermal heating in 1908.

90% of all homes in Iceland are heated by geothermal.

First power plant in 1969 at Bjarnarflag.

Current power generation capacity of 664 MW.

The Hellisheidi plant, with 303 MW capacity, is one of the largest in the world.

Iceland’s UNU Geothermal Training Programme has graduated more than 550 professionals.

Iceland’s largest geothermal utility is Reykjavik Energy (now restructured under “Our Nature”).

Two thirds of Iceland’s primary energy supply comes from geothermal.

Icelandic companies and institutions have also been very active internationally, working on projects on all continents.

Expert knowledge of the energy industry is a recent and welcome addition to Iceland’s exports, as the experience of Icelandic geothermal experts is highly valued and in great demand. Today, Icelandic firms are working on geothermal projects in Asia, East Africa, North and Latin America, Europe, the Pacific and the Caribbean.

The sharing of knowledge through internationally ac-

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Strong engineering and consulting background and international activities.

The Iceland Geothermal Cluster Initiative strengthens the sector’s competitiveness.

claimed educational programs is also significant for the country. Iceland hosts the United Nations University Geothermal Training Programme that has graduated hundreds of international geothermal experts, coming from and returning to the farthest corners of the world.

But Iceland is also at a crossroads. Will it see more development, or will it be solely an exporter of knowledge?

Iceland has a lot to offer, and many of its innovative uses of geothermal energy today could be applied worldwide. - AR

Issue 02 2014

COUNTRY FOCUS – ICELAND

Geothermal Resources and Potential By: Guðni Axelsson, Iceland GeoSurvey (ÍSOR) Iceland is blessed with a unique geological location, with volcanic activity providing an abundance of geothermal resources.

1 Iceland’s location on the major fault lines of the Mid-Atlantic Ridge provides not only breath-taking scenery, but also unique geology and geothermal resources. The Eurasian and North American plates are moving further apart; on average some two centimeters every year – a visible and measureable change that makes Iceland one of the most tectonically active places on earth.

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FIGURE 1

The geothermal resources stem from the unusually high magma- and heatflow from the earth’s mantle, and the tectonic activity – both associated with the interaction between the spreading Atlantic Ridge and a mantle hot-spot.

More than 30 high-temperature fields have been identified, with some lower-temperature fields alongside those.

According to Iceland’s National Energy Authority, temperatures reach 250°C in the uppermost 1,000 meters1 of the country’s high-temperature fields. In

Figure 1: This graphic shows the size of geothermal resources in Iceland, with numerical estimates of both the terrestrial energy current and the vast amount of heat stored in the crust.

Modified graphic from Pálmason et.al. 1985 & Bodvarsson 1982.

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01 Krýsuvík geothermal area, Iceland (Picture: Rosino, (C) CC BY-SA 2.0) 02 Strokkur at the Geysir, Iceland (Picture: Emil Kepko (c) CC BY 2.0) 03 Geothermal Systems overview (Picture: ISOR via UNU-GTP)

the lower-temperature areas, about 250 separate areas in total, temperatures do not exceed 150°C; these areas can be found alongside Iceland’s active volcanic zones.

Figure 2 shows a map of the distribution of geothermal systems in Iceland, classified either as high-temperature (above 200°C at 1,000 m depth) or low-temperature (below 150°C at 1,000 m depth). About 25 high-temperature systems have been identified, all within the volcanic zone passing through the island. The heat sources of these are believed to be cooling magma bodies at depth. Conversely, 1 Renewable Energy in Iceland, June 2009

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Issue 02 2014

COUNTRY FOCUS – ICELAND

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Issue 02 2014

AFFAIRS

Icelandic Geothermal Plants and Outlook Exploration of and planning for the use of geothermal heat started as early as 1947, in the Hengill area near the capital of Reykjavik. It was in northern Iceland, however, where geothermal energy was first harnessed for electricity generation in the 1960s, by the Bjarnarflag geothermal power plant at Lake Myvatn. Geothermal electricity generation has increased significantly in recent years due to the rapid expansion of energy-intensive industry. Today there are six geothermal power plants in Iceland; together they generate approximately 24.5% of Iceland’s electricity production, with a total installed capacity of 664 MWe and a production of 4,600 GWh. The majority of Iceland’s geothermal power plants use high-enthalpy geothermal resources with temperatures in excess of 200°C.

Svartsengi First year of operation: 1977 Capacity: 75 MWe – 150 MWth Turbine: 6 MW, 7x1.2 MW, 2x30 MW Wells: 24 (22 for production and 2 for reinjection)

Reykjanesvirkjun First year of operation: 2006 Capacity: 100 MWe Turbine: 2x50 MW Wells: 28 (9 tapped) The Reykjanes geothermal power plant is located 18 km west of the Svartsengi power plant on the Reykjanes Peninsula. The area has a high geothermal potential, which posed challenges during construction due to the high temperatures of the geothermal fluid, reaching up to 320°C. Construction started in 2004 and the plant went online in 2006. It is the only geothermal power plant to use seawater for cooling. The plant is owned and operated by HS Orka.

The Svartsengi geothermal field is a high-enthalpy geothermal field located in the south-west of Iceland on the Reykjanes Peninsula. The Svartsengi plant is a combined heat and power plant (CHP). The geothermal fields of Svartsengi yield geothermal brine, rich in minerals, silica and algae. This unique brine is used for the world-famous Blue Lagoon Spa. The power plant was developed in six successive phases, with operations starting in 1977 and the last phase finishing in 2008. The Svartsengi plant is the first CHP power plant in the world. The plant is owned and operated by HS Orka.

TOP 10 COUNTRIES INSTALLED CAPACITY IN MW, 2013 USA

3,389

Philippines

1,968

Indonesia

1,339

Italy

901

New Zealand

895

Mexico

812

Iceland

664

Japan

537

Kenya

205

Costa Rica 0

208 500

1,000

1,500

2,000

2,500

Hellisheidi

3,000

First year of operation: 2006 Capacity: 303 MWe – 133 MWth Turbine: 6x45 MW, 33 MW (low pressure) Wells: 71 (57 production and 14 reinjection)

ICELAND GEOTHERMAL ELECTRICITY GENERATION, DEVELOPMENT, GWH/ YEAR Electricity generation 5500 (GWh/year) 5000 4500 4000 7 Hellisheiði 303 MW

3500 3000 2500

6 Reykjanes 100 MW

2000

5 Húsavík 2 MW

1500

4 Nesjavellir 120 MW

1000 500

3 Krafla 60 MW

1 Bjarnaflag 3,2 MW

2 Svartsengi 76,4 MW

0

1972

1977

1982

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1987

1992

1997

2002

2007

2012

Hellisheidi geothermal plant is situated in the Hengill area of south-west Iceland, only 18 km outside the capital, Reykjavik. The plant is a flash steam, combined heat and power plant (CHP), producing electricity and hot water for district heating. The geothermal field is one of the largest high-enthalpy systems in Iceland. Construction started in 2005 and the first phase of the plant went online in 2006; full capacity was reached in 2011. The plant is one of the largest geothermal plants in the world, and is owned and operated by Reykjavik Energy.

Issue 02 2014

FINANCE AND LEGAL

SST-500 GEO steam turbine Designed for geothermal applications www.siemens.com/energy/sst-500geo

The SST-500 GEO steam turbine is specifically designed for low steam parameters and for the harsh conditions of geothermal steam cycles. The single casing, doubleflow condensing turbine is ideal for the handling of large steam volume flows of main supply and – for dual flash applications – admission steam over a wide range of power. Each turbine is designed uniquely for the particular resource conditions by adapting the blade path within the standardized casing.

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The features and materials of the SST-500 GEO remove excess moisture and mitigate the effects of the contaminants common in geothermal steam, greatly enhancing reliability and efficiency. Count on it!

Contact Siemens for information on our entire geothermal product line.

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