Opportunities in Small-scale Geothermal Power Plants in Iceland
Considerable value could be in constructing additional small-scale geothermal power plants in Iceland, according to Mannvit’s Geothermal Division Manager, Kristinn Ingason. There are few such power plants in Iceland, but they are likely to increase in the coming years, says Kristinn in an interview with Icelandic business newspaper Vidskiptabladid.
Small-scale geothermal power plants are geothermal power plants that generate less than 10 megawatts of electricity from electricity for electricity generation. Such power plants may be stand-alone low-temperature power plants or additions to larger power plants and their distribution systems, such as so-called wellhead stations or bottoming power plants.
Low-temperature power plants are built specifically to utilize low-temperature geothermal energy that is not utilized by another power plant. One such is located in Húsavík, Iceland, but is not in operation. In February 2019, the geothermal energy company Varmorka completed the first phase of financing and purchasing equipment under low-temperature power plants in Iceland, but such a power plant is being built at Flúdir in the South of Iceland.
Bottoming plants utilize the residual heat (water/vapor) that is not used in large geothermal power plants. An example of such a power plant is Turbine unit 11 in Hellisheidi geothermal power plant, which is not classified as a small-scale geothermal power plant.
Finally, geothermal wellhead stations are set up near geothermal wells to utilize high pressure - which would otherwise be eliminated - as soon as possible, without utilization being maximized, but such stations are not built for long periods and are portable between drilling rigs. The renewal of the Bjarnarflag small-scale geothermal power plant is one such example.
Electricity Prices Determine Efficiency
Kristinn Ingason, Division Manager for geothermal power plants at Mannvit, says it can be advantageous to build small-scale geothermal power plants in Iceland. "The quality of the country is such that Iceland is rich in renewable energy sources such as flowing water, tidal power and geothermal energy, and this energy is cheap to harness. So, there is a great deal of synergy in producing electricity and heat in combination in CHP plants. Where the facilities and equipment is shared in electric power stations and district heating, the value is increased, where electricity and hot water can be produced. In addition, it is advantageous to build such power plants near a region that is not as pristine and delicate as areas that are untouched by human activity. Then the access to roads, pipes and power lines is nearby, which lowers costs,” says Kristinn.
He adds that environmental impact assessments (EIA) are not required for power plants that produce less than 10 megawatts of electricity. "It is therefore easier to get permits for the small-scale geothermal power plants than larger power plants," says Kristinn.
As an example of potential value in connection with small-scale geothermal power plants, Mannvit made an evaluation of geothermal wells in Ölfusdalur, Southern Iceland. According to the valuation, there is a great opportunity to utilize the geothermal fluid in Ölfusdalur and utilize it for electricity generation, central heating and for industrial processes. Thus, a 9 megawatt electricity station, 15 megawatts heating plant and geothermal baths would provide value of ISK 1 billion.
It Costs Little to Utilize the Hot Water and Connect
Many of small-scale geothermal power plants are in operation around the world, such as the United States, Croatia, Hungary and Turkey. However, very few small-scale geothermal power plants are in Iceland and most of them are not operational. Kristinn says it is related to market trends as well as costs.
"The growth of the energy market in Iceland has been tied to heavy industry in the past. The market therefore takes big leaps over time, growing in spurts, so to speak. The initial cost of small-scale geothermal power plants is higher than for larger geothermal power plants. The technology of utilizing a low-temperature water is more expensive than the traditional steam technology used in the large geothermal power plants. It also calls for more supervision during operation. In addition, the large power plants have economies of scale. So, there are many things to consider in this respect, "says Kristinn.
But what is the competitiveness of small-scale geothermal power plants? "It is based on the fact that it costs little to source the hot water and then it does not cost much to be connected to other power plants." This is often a viable option and the equipment needed for such power plants is always improving.
Pictured: Kristinn Ingason, Section Manager, Geothermal Power Plants.
Photo by Haraldur Guðjónsson, Vidskiptabladid.