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Climate Issues

The Group is one of the biggest companies in Iceland and the performance of Reykjavik Energy (RE) and its subsidiaries in environmental issues therefore matters a great deal. The Group has been at the forefront of innovation and development on climate issues over the past decades. The CarbFix process, which has been applied at the Hellisheidi Geothermal Power Plant, is a clear demonstration that it is possible to take measures to reduce greenhouse gas emissions and the climate risks we are facing. In December 2019, the establishment of CarbFix, a new subsidiary of Reykjavik Energy, was endorsed by its owners, i.e. the municipalities of Reykjavik, Akranes and Borgarbyggð.

Climate issue priorities of the Reykjavik Energy Group:

  • The goal is to achieve carbon neutrality by 2030, which is ten years sooner than had been previously planned.
  • CarbFix, a new subsidiary of Reykjavik Energy, working on increasing the sequestration of carbon dioxide both domestically and globally
  • Be a driving force in energy switching in transport

In the autumn of 2019, Reykjavik Energy and the EFLA Consulting Engineers company made an online carbon footprint calculator accessible to all so that everyone can calculate their carbon footprint in a swift and simple manner. It then provides advice on how the carbon footprint can be reduced on the basis of the data that has been entered. We all share a responsibility for tackling the threats of climate change. The state and municipalities have to do their share, businesses need to take action, and each and everyone of us can throw their weight behind making the earth liveable for future generations.

The section which deals with climate issues focuses on greenhouse gas emissions from operations and examines the projects undertaken to ensure the target of carbon neutrality by 2030 is met.

E1 Greenhouse Gas Emissions

Climate action Affordable and clean energy Industry, innovation and infrastructure Promotes UN‘s Sustainable Development Goals

Climate Change Objectives of the Reykjavik Energy Group

The Reykjavik Energy Group aims to achieve carbon neutrality by 2030 (see graph).

The application of the CarbFix method, where carbon dioxide is mixed with water and injected into basaltic bedrock at the Hellisheidi and Nesjavellir geothermal power plants, will be the main driving force behind the reduction of greenhouse gas emissions (GHG) from the Group. Other key projects that will play a crucial role in GHG reduction include the green transformation of our company vehicle fleet (switching to electricity and methane) and the utilisation of carbon dioxide in the geothermal park at the Hellisheidi Geothermal Power Plant. Veitur Utilities is also working on projects to boost the resilience of utility systems, due to the threat of climate change.

The Reykjavík Energy Group provides 45 to 75% of Icelandic households with water, sewerage systems, district heating and the fibre network. Carbon dioxide emissions from our operations have decreased substantially since 2015. GHG emissions are calculated in accordance with the Greenhouse Gas Protocol – Corporate Accounting and Reporting Standard.

See more details on Reykjavik Energy’s climate change objectives, and their progress in the appendices.

In 2019, the percentage of reinjected and sequestered carbon dioxide from the Hellisheidi Geothermal Power Plant amounted to about 25% of emissions from the plant, which is considerably less than in 2018. This can mainly be attributed to the fact that the hydrogen sulphide abatement unit at the plant had to be halted for a prolonged period, due to expansion work on the district heating utility and unforeseen malfunctions. Emissions from our vehicle fleet and employee air travel were slightly above target (see annex). Reducing emissions and waste is an ongoing project and we must continue working as a team to achieve our objectives.

The executive board approved measures to offset carbon emissions from the Group’s vehicle fleet in November of 2019. The objective will be achieved through the reclamation of wetland areas (the Wetland Fund).

GHG emissions and mitigations 2015-2030

Direct & Indirect GHG Emissions

In 2019, Scope 1, or direct emissions from Reykjavik Energy Group’s core operations, amounted to 43,500 tonnes of CO equivalent. These emissions can be traced to electricity and hot water production at ON's geothermal power plants, geothermal utilisation in the low-temperature fields of Veitur Utilities for district heating purposes (considered negligible), from HFC substances in Veitur's Utility systems, from our vehicle fleet and the Group's buildings. There were no indirect emissions due to the use of electricity and heat in the core operations of the Reykjavik Energy Group (Scope 2) as the Group produces electricity for the national grid and these emissions are already accounted for in Scope 1. No emissions are specified in Scope 2; to avoid double registering . Scope 3, or indirect emissions from waste produced by the core operations of the Group, as well as employee travel to and from work, including air travel, amounted to 1,500 tons of CO equivalent. There is no exhaustive data on Scope 3 because the production phase is not included.

Scope 1 - Direct emissions: Geothermal power plants (ON Power), supply pipeline and distribution system of Veitur Utilities, vehicles.

Scope 2 - Indirect emissions: Energy usage i.e. electricity and heating for own use and transmission losses in distribution systems. Included in Scope 1, as accounted for the Group.

Scope 3 - Indirect emissions: Waste, employee air travel and employee travel.

The Reykjavik Energy Group produces approx. 1% of Iceland's total GHG emissions, based on total emissions recorded in 2017 (Environment Agency of Iceland, 2019).

Direct & Indirect GHG Emissions 2019

My carbon footprint

9.74 tons CO2 equivalents per year An Icelander’s carbon footprint is about 12 tons per year

Jón Tryggvi Guðmundsson

Sewerage system specialist in technology and operations, Veitur Utilities

The results don´t really surprise me. I thought that travel would weigh heavier than consumption and food. It was interesting to see the breakdown of the carbon footprint into categories because that helps us to be aware of the biggest footprints, so that we can take action to reduce them. There are so many to consider, when using the carbon calculator.

E2 Emission Intensity

Climate action Affordable and clean energy Industry, innovation and infrastructure Promotes UN‘s Sustainable Development Goals

Carbon intensity is understood as the level of carbon emissions relative to each operating unit, e.g. income, production units, etc.

Carbon dioxide emission intensity

Based on the revenue and size of the premises of the Reykjavik Energy Group, the Group’s carbon intensity has contracted since 2015, or from about 1,800 CO2 equivalents to 950 tons of CO2 equivalents.

ON Power produces electricity and hot water, which is sold wholesale to Veitur Utilities. The carbon footprint for each produced unit of electricity and hot water at ON Power has decreased since 2015.

Veitur Utilities provide electricity, hot water and potable water to consumers and also manages the sewerage system. The carbon footprint from the distribution of all of the above, has decreased since 2015.

The carbon footprint from Reykjavik Fibre Network's fibre optic data transmission has decreased since 2015.

Please note that the unit for electricity and hot water is in kWh, cold water is m3, sewerage systems in 'per person' units and fibre optics data transmission is in gigabytes

The margin of error for discharge is 5%.

The Reykjavik Energy Group does not emit any ozone-depleting substances in its activities.

Description Unit 2015 2016 2017 2018 2019
Greenhouse gas emissions (scope 1, 2 og 3) without land use mitigation t of CO2 e per year 72,300 45,400 42,200 44,500 44,800
Revenues ISK Billion 40.3 41.4 44.0 46.3 46.3
Size of premises Thousand m3 780 780 780 780 780
Carbon intensity per unit of revenue t of CO2 e per year/ISK billion 1,794 1,097 959 969 968
Carbon intensity per unit of premises t of CO2 e per year/thousand m3 92 61 57 57 57
Potable water:
Carbon intensity per produced unit of potable water and distribution g CO2 e per year/m3 11.7 9.5 7.4 7.8 7.1
Hot water for space heating:
Carbon intensity per produced unit of hot water from low temperature fields* g CO2 e per year/kWh ~0 ~0 ~0 ~0 ~0
Carbon intensity per produced unit of hot water from geothermal power plants g CO2 e per year/kWh 9.8 8.3 7.5 7.4 7.5
Carbon intensity of hot water distribution g CO2 e per year/kWh 0,8 0,8 0,7 0,9 0.
Weighted average of carbon intensity for hot water (Veitur Utilities) g CO2 e per year/kWh 4.4 3.6 3.2 3.2 3.2
Electricity:
Carbon intensity per produced unit of electricity at power plants** g CO2 e per year/kWh 10.4 8.9 8.1 7.4 7.5
Carbon intensity per unit of distributed electricity g CO2 e per year/kWh 1.0 1.0 1.0 1.2 0.8
Total carbon intensity per unit of produced electricity (ON Power) and distributed electricity (Veitur Utilities) g CO2 e per year/kWh 11.4 9.9 9.1 8.7 8.3
Wastewater systems:
Carbon intensity per population equivalent (PE) of wastewater systems g CO2 e per year/PE 1,041 790 775 998 480
Data transmission through the fibre network:
Carbon intensity on data transmission through fibre network g CO2 e per year/gigabyte 0.7 0.7 0.7 0.7 0.5

*Carbon footprint approximately 0 g/kWh.
**According to the Iceland Inventory Report, the weighted average of greenhouse gas emissions per kWh of electricity, produced by hydro power and geothermal energy in Iceland, in 2017 was 8.8 g. For hydroelectric power, greenhouse gas emissions per kWh of electricity amounted to 1.5 g and for geothermal energy 29 g.

In terms of percentages, the re-injection of carbon dioxide from the Hellisheidi Geothermal Power Plant was 25% and was somewhat lower than in 2018 as the hydrogen sulphide abatement unit at the plant had to be halted for a prolonged period, due to work on the expansion of the district heating utility of the plant and unforeseen malfunctions.

Annual percentage of reinjection of carbon dioxide emissions from the Hellisheidi geothermal power plant in 2013-2019

Emission intensity of hydrogen sulphide

In relation to the turnover of the Reykjavik Energy Group, the emission intensity of hydrogen sulphide in the Group contracted since 2015, i.e. from 367 to 274 tons of hydrogen sulphide, see table.

The concentration of hydrogen sulphide (H2S) in populated areas did not exceed limits in Nordlingaholt, Lækjarbotn and Úlfarsárdalur, but exceeded the limit once in Hveragerdi in 2019. The re-injection of carbon dioxide from the Hellisheidi Geothermal Power Plant was 65%, or somewhat lower than in 2018 because the hydrogen sulphide abatement unit at the plant had to be halted for a prolonged period, due to work on the expansion of the district heating utility of the plant and unforeseen malfunctions.

Hydrogen sulphide emissions from the Nesjavellir and Hellisheidi geothermal power plants amounted to 12.7 thousand tonnes in 2019. The margin of error for discharge is 5%.

A plan has been developed for emission-free production at ON Power’s plants in the Hengill area.

Description Unit 2015 2016 2017 2018 2019
Hydrogen sulphide emissions Tons 14,800 11,900 9,700 9,500 12,800
Electricity production kWh 3,249,250,000 3,411,110,000 3,473,297,000 3,506,531,000 3,537,972,000
Hydrogen sulphide intensity per unit of produced electricity (ON Power) gr. H2S/kWh 5.7 4.7 3.8 3.4 3.6

Annual percentage of reinjection of hydrogen sulphide emissions from the Hellisheidi geothermal power plant in 2013-2019

My carbon footprint

11.30 tons CO2 equivalents per year An Icelander’s carbon footprint is about 12 tons per year

Bellinda Eir Engilbertsdóttir

Land specialist, Reykjavik Energy

It’s difficult to understand our carbon footprint and the radical measures each and every one of us needs to take to keep global warming within limits. I live in Akranes but work in Reykjavík and travel in between by carpooling or I work from home. I don´t think I can reduce my travel carbon footprint any more than I already have. Consumption is clearly something I really need to look into. I must consider each purchase and decide if it is necessary or not. The future of coming generations is determined by the decisions we make today!

The Reykjavik Energy Group produces electricity and hot water from renewable energy sources such as geothermal energy and hydropower. 9% of the electricity and about 1% of the hot water are own use.

Fossil fuels, particularly diesel oil, are used during construction and in our operations. All fossil fuel consumption is third party and therefore indirect.

The percentage of direct energy consumption (electricity and hot water) of the Reykjavik Energy Group is 99.9% and indirect energy consumption (fossil fuels and methane) is 0.1%, (see figure).

Primary energy consumption is expressed in megajoules (MJ), for comparison purposes (see table).

Direct primary energy use (own use) of the Reykjavik Energy Group Unit 2015 2016 2017 2018 2019
System:
Electricity MJ 52,57,772,000 5,404,789,000 5,626,032,000 5,544,412,000 5,580,586,900
Hot water* MJ 220,467,000 177,323,000 273,099,000 207,700,000 193,540,500
Transport:
Methane MJ 411,000 563,000 867,000 795,000 1,279,200
Petrol** MJ 940,000 801,000 572,000 4760,00 370,100
Diesel oil** MJ 6,393,000 6,738,000 6,524,000 6,113,000 6,026,900
* Primary energy use: Based on utilisation down to 5°C
** Calculation quotients: Based on their lower heat value

Direct energy consumption in each operating unit, e.g. size of premises, average equivalent unit, is sometimes called energy intensity.

Our own use of electricity is solely for the production of hot water, the pumping of sewage, hot and cold water and the operation of our premises. Own electricity consumption in relation to the size of our premises has increased somewhat since 2015 and hot water usage has decreased.

The primary energy consumption is expressed in megajoules (MJ), for comparison purposes.

RE's electricity and hot water consumption per unit of premises

Energy consumption per position has decreased when compared with 2015, whereas the use of methane has increased (see figure and table).

Primary energy consumption is expressed in megajoules (MJ), for comparison purposes.

RE's fuel consumption per employee

Carbon indicators Unit 2015 2016 2017 2018 2019
Electricity (direct primary energy use) MJ 5,257,772,000 5,404,789,000 5,626,032,000 5,544,412,000 5,580,587,000
Hot water (direct primary energy use)* MJ 220,467,000 177,323,000 273,099,000 207,700,000 193,540,500
Size of premises Thousand m3 780 780 780 780 780
Employees Number 458 498 509 541 601
Methane MJ 411,000 563,000 867,000 795,000 1,279,000
Fossil fuel** MJ 7,333,000 7,539,000 7,096,000 6,589,000 6,397,000
Premisses:
Electricity MJ/m3 6,700 6,900 7,200 7,100 7,200
Hot water MJ/m3 300 200 400 300 200
Employees:
Electricity MJ/employee 11.480.000 10.853.000 11.053.000 10.248.000 9,286,000
Hot water MJ/employee 356.000 537.000 384.000 322,000
Methane MJ/employee 1.100 1.700 1.500 2,100
Fossil fuel MJ/employee 16.000 15.100 13.900 12.200 10,600
* Primary energy use: Based on utilisation down to 5°C
** Calculation quotients based on their lower heat value

Primary Energy Source

The Reykjavik Energy Group produces electricity and hot water for district heating by utilising renewable energy sources such as geothermal energy and hydropower. Part of this energy is used by the Group for its own operations. Electricity and hot water are the main sources of energy used for operations and are 99% renewable. Primary energy use is expressed in mega joules (MJ), for comparison purposes.

Energy use Unit 2015 2016 2017 2018 2019
Electricity (direct primary energy use)* MJ 5,257,772,000 5,404,789,000 5,626,032,000 5,544,412,000 5,580,587,000
Hot water (direct primary energy use)* MJ 220,467,000 177,323,000 273,099,000 207,700,000 193,540,500
Methane MJ 411,000 563,000 867,000 795,000 1,279,200
Fossil fuel MJ 7,333,000 7,539,000 7,096,000 6,589,000 6,397,100
Total energy use MJ 5,485,983,000 5,590,214,000 5,907,094,000 5,759,496,000 5,781,804,000
Percentage of renewable energy of total energy use % 99.9 99.9 99.9 99.9 99.9
* Primary energy use is based on utilisation down to 5°C

We monitor the impact of climate change on our operations. Climate change could affect the resilience of utility systems which would subsequently have a direct impact on the company’s ability to operate and provide crucial services to the public. See a detailed discussion on the impact of climate change in Section E8 on climate change monitoring by the Board and Section E9 on climate change monitoring by the Executive Board.

Renewable Energy Intensity

Energy consumption in each operating unit, e.g. income, production units, etc. are sometimes called energy intensity.

The renewable energy intensity of the Reykjavik Energy Group is high. For every megajoule (MJ) that we use of non-renewable energy, we use 900 MJ of renewable energy.

My carbon footprint

15.76 tons CO2 equivalents per year An Icelander’s carbon footprint is about 12 tons per year

Dace Liapina

Project manager, Reykjavik Fibre Network

The high carbon footprint surprised me when I saw it. I just wasn’t sufficiently aware of it. I clearly need to reduce my consumption habits, buy fewer unnecessary things and clothes and reduce my trips abroad.

E8 Climate Oversight / Board

Reykjavik Energy Group's Board of Directors oversees and manages climate-related risk for the Group.

In 2019, the Board requested information on the potential impact of climate change on operations and this data is currently being compiled. The Board approved the objective of achieving carbon neutrality by 2030 in a meeting held in November, 2019. Implementation work within the various units is underway.

The Board approved the establishment of the publically owned company 'CarbFix', in the autumn of 2019. CarbFix specialises in sequestration methods used at the Hellisheidi Geothermal Power Plant, with promising results. The establishment of the company was endorsed by its owners, i.e. the municipalities of Reykjavik, Akranes and Borgarbyggð in December of 2019.

E9 Climate Oversight / Management

Reykjavik Energy Group's Executive Board oversees and manages climate-related risk for the Group.

The Group has mapped out the impact of climate change on operations, focusing on utility systems and potential adjustments needed to accommodate extreme precipitation, quick thaws, temperature changes and rising sea levels. Water utilities monitor microbial contamination in potable water, in real time, to be able to respond accordingly and to ensure quality. Our hot water utilities evaluate the future demand for hot water and also seek out new ways to increase efficiency. These are all necessary steps in ensuring the security of supply. Sewerage system utilities monitor sea level forecasts for future planning purposes. Sustainable Drainage Solutions (SuDS) are used to channel and filter rainwater from roads before it flows into rivers and lakes. This also boosts biodiversity and enhances the urban environment.

These projects are both mitigation measures and preparation for climate change. Veitur Utilities, a subsidiary of Reykjavik Energy, is responsible for their implementation, in collaboration with the municipalities.

E10 Climate Risk Mitigation

Reykjavik Energy funded green projects for a total of ISK 13 billion in 2019. ISK 1.5 billion was spent on new projects, including power production from renewable energy sources, expansion of district heating utilities, water protection and sewerage system improvements, the IOT of utility systems, carbon sequestration and projects to boost the resilience of utility systems. This funding amounts to 30% of the Group’s turnover.

The CarbFix process, used to successfully remove carbon dioxide from the Hellisheidi Geothermal Power Plant, started as an innovation and development project in 2007. The cost of the development and management of this process has so far amounted to ISK 7 billion. CarbFix has received approx. ISK 5 billion in grants. Reykjavik Energy Group’s net contribution to CarbFix and related projects is over ISK 2 billion. The CarbFix project is proof that time and funding can help environmental and climate change projects become a reality.

My carbon footprint

7.91 tons CO2 equivalents per year An Icelander’s carbon footprint is about 12 tons per year

Olgeir Gunnsteinsson

Malfunction detection specialist, Veitur Utilities

The result didn’t surprise me much, apart from my high consumption rate, since I rarely buy unnecessary things. I also think that the consumption of unnecessary products and food waste in society as a whole are quite underestimated in this debate, since these factors have a direct impact on calculations. I cycle to and from work and rarely go abroad, unless it's work-related.

The reduction of emissions from transport is a great opportunity for Icelanders to tackle climate change and improve air quality in populated areas. Reykjavik Energy and its subsidiaries can contribute to this green transformation by by supporting the electrification of Iceland's transport system.

An agreement on the development of city infrastructure to facilitate the electrification of the city's transport system was signed between the City of Reykjavik, Orkuveita Reykjavíkur and Veitur Utilities in the spring of 2019. Veitur Utilities will provide grid connections for charging equipment at various Reykjavík City premises and at charging points requested by the public. Reykjavík Energy and the City of Reykjavik also established a fund to support the installation of charging points in multi-dwelling buildings. ISK 19.5 million was granted from the fund in 2019. Veitur and OR then entered into corresponding agreements with the municipalities of Akranes and Gardabaer in 2019. Design and tendering began in 2019 and construction in the beginning of 2020.

The roll-out of ON Power's fast-chargers along highways and in urban areas has demonstrated that electric cars are a real choice for people and businesses. ON Power is at the forefront of building infrastructure for the energy-shift in transport in this country. There are now over 80 ON charging points, all over Iceland. ON also provided charging points for a number of private companies and institutions, half of which will be used by the public.

The Energy Fund allocated grants in two categories; for the development of charging equipment for hotels and accommodation all over the country and for the development of fast-charging equipment for public use. ON Power received the highest grant in both categories because of its successful history in implementing these types of projects.

The number of electric cars in Iceland and ON Power charging points

Planned charging-point installations of ON Power
Super chargers (150 kW DC) Fast-charger (50 kW DC) Charging-points (AC)
Staðarskáli (2) Skjöldólfsstaðir á Jökuldal About 20 hotels all over Iceland
Varmahlíð (2) Capital Area (6)
Akureyri (1) West-Iceland (4)
Mývatnssveit (2) Westfjords (1)
Egilsstaðir (2) South-Iceland (5)
Höfn – Nesjar (1) East-Iceland (2)
Hvolsvöllur (1) North-Iceland (2)
Kirkjubæjarklaustur (2)
Selfoss (2)
Reykjanes – airport area (2)

The Reykjavik Energy Group has been at the forefront of innovation and development on climate issues for the past decade. Lower carbon dioxide emissions from the Hellisheidi Geothermal Power Plant using the CarbFix and SulFix reinjection methods, the installation of charging stations for electric vehicles (EV), the green transformation of our fleet and carbon sequestration measures at ON sites are clear examples of this.

This work is being conducted in accordance with multiple collaboration agreements and plans in the field of science and technology in the university community, both domestically and abroad. The collaboration of the business sector and the academic community is often a platform for the development of ideas into concrete projects that can prove useful to the business community.

Examples of promising projects of this kind that have been launched can be seen below and in the appendix:

  • Carbon footprint-free production of geothermal energy
  • Ongoing development of rock carbon sequestration measures
  • The green transformation of transport in Iceland
  • Experiments in the production of hydrogen as an energy source at Hellisheidi
  • Geothermal well stimulation in Geldinganes
  • Impact of forestry on carbon stocks, in forest soil, on Reykjavík Energy land