Landsvirkjun Plays a Pivotal Part in the Energy Transition


Interview with Fréttablaðið, published November 17, 2022

Landsvirkjun will play a pivotal part in the energy transition in Iceland. Meanwhile, the Company reduces own emissions and supports the energy transition internationally.

Egill Tómasson, Business Innovation Manager, Sveinbjörn Finnson, Business Development Manager, and Jóhanna Hlín Auðunsdóttir, Director of Climate and Green Solutions, discuss Landsvirkjun’s policy on environmental issues with the Icelandic newspaper Fréttablaðið.

“Energy issues are environmental issues,” says Jóhanna Hlín, “and it is quite clear that renewable energy is the way forward, and fossil fuels are fast becoming a thing of the past. The energy transition is necessary if we are to counteract global climate change, and there is consensus on the importance of electrifying energy as much as possible, everywhere in the world, in saving energy where possible, as well as revolutionising energy systems so that all types of energy used are from renewable sources. Landsvirkjun’s status in environmental issues is excellent, as the Company only generates energy from renewable sources, in addition to having one of the lowest carbon footprints globally.” Jóhanna Hlín adds that the EU’s benchmark for electricity as climate change mitigation is 100 grammes of carbon dioxide emissions per kilowatt-hour, but Landsvirkjun’s operations only emits 3.6 grammes per kilowatt-hour.

Carbon Neutral by 2025

Jóhanna Hlín says that all operations cause emissions and Landsvirkjun’s operations are no exception. “For years, the Company has worked tirelessly towards adapting the operations for climate change, as well as mapping the operations’ emissions, reducing emissions, and publishing the result in the Annual Climate Account, which is audited by independent auditors.”

Landsvirkjun will become carbon neutral by 2025, and according to Jóhanna Hlín, the Company is already well on its way to achieving that goal, as the carbon footprint from its operations has been reduced by 61% since 2008. “The largest challenge is reducing emissions from geothermal power by 60%, which the Company will achieve in three years. These emissions are equal to 2.5% of Iceland'sobligations on emissions reduction under the Paris Agreement.”

Various Measures for the Energy Transition

“Landsvirkjun will be at the forefront of Iceland’s energy transition, using various measures,” says Egill, and continues: “First and foremost it is the reduction in own emissions, as Jóhanna Hlín explained. This means that Landsvirkjun now offers electricity generated with one of the lowest known carbon footprints in the world. Secondly, the Company conducts two development projects for electricity fuel, one is a green hydrogen project, and the other is a methanol project, intended to support the energy transition in transport. These projects are in a developmental phase, and a decision for further investment or the role of Landsvirkjun in the production, has not been taken. That will have to wait until more information regarding costs, the legal framework, governmental support, demand, and more, becomes available.”

Green Hydrogen and Methanol

Egill heads the first project, which aims at developing a production of green hydrogen, which will be used to adopt the energy transition in heavy goods transportation. “The project is intended to pave the way for green hydrogen adoption, to advance the possibility of reaching Iceland’s targets in climate issues, at least when it comes to land transport. Hydrogen can replace fossil fuels, as a completely carbon free fuel, hence, reducing emissions considerably, as one large commercial vehicle’s emissions equal dozens of private cars emissions.”

Sveinbjörn heads the second project, which explores the possibility of producing methanol, a fuel considered suitable for the maritime energy transition. “Methanol is a product made from hydrogen and carbon dioxide. Engines running on methanol are already in use, and international shipping liners, e.g., Mærsk, have commissioned multiple new vessels running on methanol to be built for their operations. Various Icelandic companies, in the field of shipping and the fishing industry, have shown interest in the methanol option, deeming it beneficial first steps in their energy transition. Landsvirkjun has started a collaboration with the German company PCC SE on the feasibility of methanol production. Carbon dioxide could be captured at PCC SE’s silicon plant at Bakki, in northern Iceland, for use in the methanol production, as well as green hydrogen, which would be produced with Landsvirkjun’s electricity from renewable sources.”

Close Collaboration with Businesses

Sveinbjörn emphasises the importance of Landsvirkjun working closely with other companies, so that the Company will have the capacity to meet demand for the type and quantity of green fuel for their energy transition. “The energy companies do not set the agenda for the energy transition, rather the customers. This applies to, e.g., the shipping liners, fishing companies, and airliners. Hence, Landsvirkjun has a formal collaboration with Eimskip, Icelandair, and several other companies regarding their energy transition.”

Egill adds that it is also vital that the Government makes it clear how it sees the development of the energy transition in Iceland. “Hopefully, a plan will be in place when the hydrogen- and electric fuel manual for Iceland will be published. In addition to policy making, the Government must give financial support to this development, as major investment is needed, or the energy transition will not materialise, either at production or consumer level. This goes for the European projects which are already running, and future projects in Iceland.

Exporting Expertise

Landsvirkjun supports the international energy transition via its subsidiary, Landsvirkjun Power, which operates the Company’s international projects.

“The role of Landsvirkjun Power is to export the expertise which has been gathered in Iceland in the field of renewable energy sources, thus, supporting the international energy transition. Landsvirkjun Power provides consultation regarding preparation, construction, and operations for renewable energy power stations, and is involved in their development. The latest example is a 10 MW hydropower station in Georgia, partly owned by Landsvirkjun,” says Sveinbjörn, and adds that Landsvirkjun Power is currently exploring the feasibility of projects in Greenland and Canada, to support the energy transition in the Arctic region.