Kári Jónsson: Energy System Analysis for Iceland using the concept of Energy Scenarios - Implementing Iceland into the energy model Balmorel, Masters's Thesis, DTU, 2012.
In Iceland, the energy system is characterized by a high utilization of local renewable resources. Both hydro- and geothermal resources are abundant in Iceland and these two resources supply most of the energy demand in Iceland. In the year 2010, hydro power plants produced around 74% of the total electricity generation and the remaining 26% were produced by geothermal power plants. District heat is produced by using geothermal heat and is mainly used for space heating in the residential sector. A great majority of the electricity generation in Iceland is consumed by energy intensive industries or more than 80%. In this study, the Icelandic energy system is described and its development until the year 2050 is analysed by using the concept of energy scenarios. This type of analysis is not widespread in Iceland and is evaluated as a useful tool for analysing the development of the Icelandic energy system. Three energy scenarios were created in this study and are based on some of the future options that Iceland is facing. Of these options, the export electricity through a submerged transmission cable to Europe is being discussed and the project is now considered both technically and economically feasible. Another option is the continuing penetration of energy intensive industries in the energy system in Iceland. Both of these options are energy intensive and could have large impacts on the energy system and the resources in Iceland. Excessive production from the hydro and geothermal can have negative impacts on the environment and the society and a master plan for the hydro- and geothermal resources has been developed in Iceland to minimize those impacts and to rank proposed power plant options based on economic, environmental and social factors. In the work presented here, the Icelandic energy system is implemented in the energy model BALMOREL and the energy scenarios created are simulated and analysed. The results from the simulations suggest that investment in new power capacity is needed to meet the increased demand for electricity and that the electricity production from hydro and geothermal resources might be exceeded in the next decades, requiring that other sources of energy are exploited.