Iceland’s Abundance of Energy Can Iceland Build a Future on Hydrogen and Geothermal?

We see Iceland as the world’s laboratory for a decarbonized future,” says Ingibjorg Sñlrun Gisladñttir, the country’s foreign minister and former mayor of Reykjavik. Of course, many countries say similar things, but Iceland has a head start, because it’s partly decarbonized already. Some 85 percent of Iceland’s homes are heated with geothermal energy, which also produces 18 percent of the country’s electricity. The rest is emission-free hydroelectric power from the many dams on Iceland’s free-flowing rivers. As much as 72 percent of Iceland’s primary energy is renewable, the highest percentage in the developed world. Coal smoke no longer darkens the skies.

Of course, it helps that there are only 310,000 people in a four-fifths uninhabitable island the size of England. Iceland has no less than 20 active volcanoes, and energy from the center of the Earth is essential to understanding the place. Just 200 miles south of the Arctic Circle, Iceland sits on the boundary of the North American and Eurasian plates, which are very slowly moving away from each other. Super-heated water lies just below the surface, and it’s not uncommon to see steam rising from natural vents. The word “geysir” is Icelandic, and the Vikings used to hold their annual councils at the restless site where the two continental plates meet.

Iceland’s geothermal story is not new; the first district hot water heating was introduced in 1928. The plan to become the world’s first hydrogen energy economy is much newer, dating to 1998 and the forming of Icelandic New Energy, joining a number of Icelandic power companies, the University of Iceland, Daimler, Norsk Hydro and Shell. The imported fossil fuel running the country’s cars, trucks and ships constitute the only “dirty” part of what is otherwise a remarkably clean energy system.

In 2003, the Icelanders opened the world’s first commercial hydrogen filling station in Reykjavik. There are only 60 regular gas stations in the capital, so if a third of them offered hydrogen they could probably cover the city. As part of the Smart-H2 project, a trio of Daimler fuel-cell buses was recruited and plied the city streets for four years, but that experiment ended in 2007. The newest hydrogen vehicles in Iceland are a fleet of 10 Toyota Priuses converted by the U.S. company Quantum to burn hydrogen. Two Daimler fuel-cell cars (based on the Mercedes A-Class) are also on the road.

Jñn Bjñrn Skülasson, general manager of Icelandic New Energy, offered rides in the newly arrived Priuses. Icelandic customers will be able to lease the vehicles at favorable rates and to rent them, as several of the cars are being delivered to the local Hertz.

Skülasson estimates that the brief run of the fuel-cell buses saved 18,000 gallons of diesel fuel and the emission of 300 tons of greenhouse gas. By mid-2009, the hope is to have as many as 40 hydrogen cars on the road, he says. And since 60 percent of Iceland’s income is derived from its fishing fleet, Smart-H2 will this year introduce a fuel cell on a boat, specifically a 125-ton, 150-passenger whale-watching craft. Alas, the 10- to 15-kilowatt Ballard fuel cell won’t replace the ship’s engine, just the auxiliary power unit (APU) that provides electrical power.

“We’re hoping to prove that fuel cells can work at sea, since they hate salt,” Skülasson says.

Iceland’s hydrogen economy is running about five years behind, according to the timeline on the wall at the pumping station in Reykjavik. The commercial phase (with vehicles reaching actual paying customers) was scheduled to start in 2010, and it’s clear that won’t happen. But the project is moving forward.

Jon Bjorn Skulasson and his hydrogen Prius.

Icelanders own as many cars per person and drive nearly as much as Americans do. Thorsteinn Sigfusson, professor of physics at the University of Iceland and a hydrogen pioneer, points out that, thanks to geothermal and hydroelectric, Icelanders’ per capita carbon dioxide (CO2) emissions are half as much as those in the U.S., 12 tons versus 23 tons. Reducing Iceland’s fossil fuel diet for transportation will widen the gap even further. “The use of hydrocarbons will turn out to be a glitch in time,” he says.

Only one percent of Iceland’s geothermal potential has been harnessed, Sigfusson says. Even so, the country’s abundant power resources produce far more electricity than its modest population can use. That explains Iceland’s industrial sector—polluting and electricity-hungry aluminum plants, whichrather unsustainably use 75 percent of the country’s generated power and rely on a raw material, bauxite, that has to be imported from Australia. It’s the dark side of the country’s abundant energy resources.

In the central highlands of Iceland is the new $3 billion Karahnjukar hydro plant, whose electricity will be wholly consumed by a new Alcoa aluminum smelter. Alcoa says its Icelandic aluminum production is the lowest emission of its kind in the world, but that hardly assuages critics such as Thora Ellen Thorhallsdottir of the Institute of Biology at the University of Iceland. She points out that there are an amazing 30 geothermal and hydroelectric plants planned in Iceland, and if built they would affect or flood three percent of the country’s land mass—in some of its most pristine areas. The reservoir for Karahnjukar alone covers 22 square miles, flooding reindeer and bird habitat.

Iceland’s abundant hydropower resources.

“This is the largest wilderness area in Europe, much of it never inhabited by humans,” Thorhallsdottir says. Construction of another aluminum plant like the giant Alcoa unit in the eastern part of the country would require four hydroelectric plants, and there are five proposed smelters, she says.

The pop star Bjork, Iceland’s most famous personality, calls the Karahnjukar project “crazy,” and her mother has staged a hunger strike over it. Of course, hydro plants like Karahnjukar produce a tiny fraction of the CO2 that would be emitted by the many coal plants on the books in the U.S. Iceland’s challenges seem small when seen through a lens of mountaintop removal and open-pit coal mining, not to mention tar sands production, but they’re still significant.

The Alcoa plant will create jobs in Iceland’s underpopulated east, and that’s drawn some support. But 29 percent of the country’s population rate Iceland’s landscape as a more important symbol of the country’s national identity than the flag and the Icelandic language. Protecting this barren but beautiful country, not much changed since the pioneer Ingñlfur Arnarson first saw it in 874 A.D. is, for many, nonnegotiable.