Efficient utilisation of the geothermal output

The Resource Park that has been developed in the neighbourhood of HS Orka’s geothermal plants in the Suðurnes region is unique; it heralds the future, new ways of thinking and encourages further development, increased use and more efficient utilisation of the geothermal output. 

The companies of the Resource Park directly utilise two or more resource streams from the geothermal plants of HS Orka and therefore must, for obvious reasons, be located in the Suðurnes region. The operation of the Park has been developed on the basis of joint interests, such as the effluent from one company comprising raw material for another. Through their proximity; and close interdisciplinary co-operation, HS Orka uses the Resource Park to get people to think about the valuable resources with which the company has been entrusted and is expected to ensure will endure for generations to come.

"Society without Waste"

The object of the Resource Park is to establish a “Society without Waste” and to ensure that all resource streams that flow to and from the companies in the Park are utilised to the fullest extent possible, in as responsible a manner as possible, and for the benefit and further progress of the community. The utilisation of geothermal energy in the Suðurnes region provides raw material for a diverse range of manufacturing. The multiple uses bring forth an economy of scope in which the same raw material is used in the manufacture of numerous products. The operations within the Resource Park are characterised by research, development and innovation. A part of the operation of the Resource Park is to monitor and create a venue for scientific and technological development in order to better utilise the resource streams and thereby create a venue for the collaboration of companies in different sectors and with different backgrounds. The Resource Park has become a dynamic and rapidly growing entrepreneurial centre.

500 jobs in HS Orka Resource Park

Over 500 people currently work in HS Orka’s Resource Park. If account is taken of the synergistic effects, bought-in work and general basic services, one could argue that the Resource Park creates 1500–2000 jobs in its area of influence, assuming that one job in primary production creates 2–3 derived jobs in support industries. It is interesting to note that of the 500 employees in the Resource Park, only 35 are working in the power plants. The goods produced by the companies in the Resource Park are largely export goods, and their overall contribution to economic growth in 2013 was assessed as being approximately ISK 42bn, or just over 2% of GDP. Thus, the full utilisation of resources in the Suðurnes region results in multiple sources of revenue for the national economy.

„Full utilisation of resources is simply evidence of common sense.“ 

Albert Albertsson, Visionary HS Orka

New Resource Parks

Resource streams from the operation of HS Orka in the Suðurnes region have yet to be fully utilised. Systematic efforts are made to attract new, specialised companies to the Park that can take advantage of the unexploited raw materials streams available. A greater number of diverse and specialised companies that base their operation on research and development strengthen the Resource Park and the ideology on which its operation is based. With increased technology, processing utilisation and an increase in the number of specialised companies, the Resource Park of HS Orka will grow and strengthen over the coming years for the benefit of the Suðurnes region and the country as a whole. 

Moreover, it is HS Orka’s policy to develop new resource parks in conjunction with the utilisation of geothermal energy in other areas. The multiple use of resources supports their responsible utilisation and leads to the sustainable development of the community. HS Orka continues to cultivate its Resource Park sensibly and responsibly for the benefit of society at large. 

The production department performed well during the year, and there were few downtime incidents. The operation of the geothermal systems remained consistent with prior years.

Extraction

• The net extraction at Svartsengi was approximately 5,59 million tonnes, representing a decrease of around 16,6% due to increased re-injection of run off water. 

• The net extraction in Reykjanes was approximately 13,733 million tonnes, representing a decrease of around 0.356%. 

Electricity Production

• Electricity production at Svartsengi was 551.6 GWh, which is an increase of around 3.61% between years.
• Electricity production in Reykjanes was 786 GWh, a decrease of around 3.93% between years. 
• The total production of the two power plants decreased by approximately 0.934% between years.

Increase in electricity production at Svartsengi

3,61%

Hot water production at Svartsengi in 2014 was 2.41% less than the prior year. 

Table 2 shows an overview of the hot water production.

It should be noted that the installed production capacity is 465 l/s. This means that approximately 103.45% of productivity was achieved during the cold snap on 18 December. No significant changes have been found in the chemical composition of the hot water distributed by HS Veitur to the Suðurnes region from the reservoirs of HS Orka.

HS Orka’s cold water production to HS Veitur totaled 6,131,832 m3.

15,4 million tonnes

Extraction from the geothermal area at Svartsengi was approximately 488 kg/s on average, or a total of 15,4 million tonnes an increase of 6,9%. 

Re-injection of runoff water into deep wells SVAH-17 and -24 was around 9.8 million tonnes, which corresponds to approximately 311 kg/s on average over the year. Re-injection increased by approximately 27.5% during the year with the implementation of an additional main pipeline and a new pumping station.

Geothermal Production in the Reykjanes area

Net extraction during the year

5,59 m. tonnes

Extraction from production wells in the Reykjanes area in 2014 was around 16,336 million tonnes, which corresponds to an average annual production of 518 kg/s, or 0.086% less than the year before. 

In 2014, injection into the geothermal reservoir at Reykjanes was approximately 82.54 kg/s on average, or approximately 2,603 million tonnes. Net extraction in 2014, therefore, was approximately 13,733 million tonnes, or approximately 436 kg/s. Work is ongoing to increase Re-injection at Reykjanes.

Operation and maintenance of power plants 

The decision was made to postpone the major overhaul of unit 12 at Svartsengi for one year. The overhaul had been on the 2014 maintenance schedule. 

The reason for the postponement can be traced to some extent to the decision to carry out stress tests on the Reykjanes geothermal system by temporarily reducing production in production wells.

Reykjanes power plant

The Reykjanes power plant performed quite well, with the exception of a few short repair stops, mainly for repairs to the steam supply systems.

Annual turbine inspections were carried out on unit 2 (50 MW) on 10–15 June and on unit 1 (50 MW) on 24–29 June. In addition to regular inspections, minor improvements were made to steam piping. 

On 22 October, production well REYH10 was connected to system 2 after cleaning and maintenance. Re-injection into well 20 was reduced in mid-2014.

Svartsengi power plant

Unit 11 (30 MW) was shut down on 2–6 June for the annual turbine inspection and other maintenance. 

Unit 12 (30 MW) was shut down on 10–17 June for the annual turbine inspection, inspection of fans and cooling tower together with minor repairs to the OV6 steam system. 

Unit 3 (6 MW) was shut down 18–28 May for normal overhaul and cleaning.

The annual shutdown in OV 2 and OV 3 was on 30 September. The steam system and separator station were shut down for 10 hours for cleaning and inspection and minor renovations carried out.

Repair at Ormat units

Repairs on the air coolers at Ormat units 7 and 9 were initiated during the year. These involved lining the condenser pipes, as was done to units 8 and 10 in 2013 with good results. 

Ormat unit 4 was not in operation in October 2014 due to a malfunction in its controls unit, which will be updated in 2015. 

Hot water production towers 6, 7 and 8 underwent their 10-year maintenance inspection. De-aerator rings were replaced and other equipment inspected. The inspection revealed that maintenance on the interior of the towers will soon be necessary. This will be made much easier with the addition of the new tower 5, which is projected to be operational in Spring 2015. 

A new re-injection station with two pumps that pump runoff water from heat production was brought on-line in September. Great success was achieved in controlling surface water with the addition of the pumping station. In addition, the volume pumped into the re-injection zone increased.

There has been considerable strain on the hot water production during the coldest months in recent years.

Strain on the hot water production

The construction of a new production unit was begun in 2014, unit 5, with a production capacity of 120 l/s. The unit was sited near the powerhouse of OV 2. The tower is expected to be ready for operation by the spring of 2015.

In 2014, work was started on increasing the flow capacity of the cold water utility with a 1.5 km pipe from the pumping station at Lágar to the pump house. This work was completed on 6 November 2014. The enlargement of the flow system led to excellent increases in transfer capabilities together with energy savings in pumping.

Demand for electricity grew 

Demand for electricity grew last year. The demand increased both from new entities wishing to enter the market and from established companies that are adding to their operations.

Total electricity sales

4%

HS Orka’s total electricity sales increased by more than 4% and were somewhat characterised by the company’s production capacity and the status of the wholesale market, which has changed considerably between years as a result of the increase in demand.

No major overhauls

Notwithstanding these increases, there was a slight decrease in electricity production from the company’s power plants at Svartsengi and in Reykjanes into the transmission and distribution system compared to the previous year. No major overhauls of the power stations’ machinery were undertaken. The company plans to overhaul both of Svartsengi’s 30 MW units in 2015, as the overhaul was postponed last year. This will require increased energy purchases to meet the production loss. 

Increased purchases

Most of the electricity that HS Orka purchases from other electricity producers is in accordance with long-term agreements with Landsvirkjun and the owners of smaller hydropower plants. In addition, some is purchased through short-term agreements with other producers. Such purchases increased significantly during the year due to increased sales. 

The reason for the postponement of the overhaul of one of the 30 MW turbines at Svartsengi was the low water level at many of the nation’s hydropower reservoirs, which led to a difficult position in electricity production in Iceland and necessitated some curtailments in energy delivery.

Hydropower projects under development

In order to meet increased energy requirements in coming years, HS Orka has been examining several hydropower options in conjunction with the planned production increase from new geothermal plants. The company’s two first hydropower projects are under development and could be brought on-line within a few years. Increased purchases from smaller privately owned power plants are also being finalised.

Wholesale electricity

Wholesale electricity increased

25%

The sale of wholesale electricity increased by 25% during the year, most of which was due to sales to Landsnet for losses in the transmission system. 

Sales to Norðurál did not change much from the previous year. Income from retail electricity sales increased by 15% between years, while income from electricity sales to major users decreased slightly. 

Re-injection pipes in Svartsengi

The new re-injection pipes that were laid in 2012 and 2013 and completed at the beginning of the year. Re-injection capacity was doubled with the pipes, and the operational stability of the re-injection utilities significantly improved.

A new production unit for hot water was designed by Verkís hf. and was put out to tender during the year once the construction permits had been obtained. Construction began in the second quarter and will continue into the spring of 2015. Ístak hf. is responsible for the construction and installation. The increase in capacity is expected to cover demand for hot water until 2024.

Freshwater pipe from Lágar

Work on increasing the flow capacity of fresh water from Lágar began in the early part of 2014. Work was halted due to snow and frost in the final months of the year. The pipes had already become operational by then. Urð og grjót hf. is responsible for the construction, and finishing work will be completed by spring 2015. The project is a prerequisite for the increased production of hot water for the hot water utility of HS Veitur hf. 

Runoff pipe to the sea

Work continued on the administration of planning issues for the advancement of the drainage pipe. The decision of the National Planning Agency on assessment obligations had been referred to the Appeals Committee for Planning and Resource Issues. The conclusion of the Appeals Committee for Planning and Resource Issues was positive, and the decision of the Planning Agency, i.e. that the project did not need to undergo a full environmental impact assessment, was upheld. 

Verkís had, for the most part, completed the design. An invitation to tender for materials was issued in late summer. SET hf. will be responsible for the manufacture/procurements of pipe material. Tenders for the surface levelling of the pipe siting and service road took place in the latter part of the year, and Ístak-Ísland hf. was selected to take care of the project. 

Negotiations for the lease of state land for the project lasted for the entire year. Work on the land-use plan for the valve building was substantially completed during the year.

Exploration drilling in Eldvörp

A project environmental impact assessment was prepared for the exploration drilling, as plans assumed drilling at up to five sites. The Company anticipates that in order to confirm the workability of the geothermal area drilling will not be needed at all sites. The Planning Agency issued its opinion in September. Preparations and the creation of local plans for the drill site were subsequently initiated. The opinion of the Agency will be taken into account as regards the design of drill sites, their arrangement and the manner in which work will be carried out in the area. 

Preparation for two drilling projects

Preparations began late in the year on site plans for the construction of drilling sites for two drilling projects. These involved the drilling of an auxiliary and maintenance borehole and for an exploratory borehole. After consultation with the Planning Agency, work began on preparing a query concerning the need for assessment, and at the same time, work began on local plans for the drilling sites. Both projects involve the enlargement of pre-existing drilling sites in the Svartsengi area just north of Mount Þorbjarnarfell. Following the tender process Jarðboranir hf. (Iceland Drilling Co.) was selected as the drilling contractor. The project also involves drilling at the Reykjanes Power Plant.

Preparations were initiated on a research schedule and application for investigation permits for the area to the east of Stóra-Sandvík. Negotiations with landowners were started. 

Joint venture for Hvalá

During 2014, HS Orka acquired an interest of 35.6% in Vesturverk ehf., a joint venture for the Hvalá hydro development project at Ófeigsfjörður in the Strandir region. HS Orka has the option to acquire up to 50% of Vesturverk, and such an increase in investment will be subject to the results of development work and feasibility studies over construction of a power plant.

Agreements with landowners in the area for water rights were reached during the year, and negotiations on land use took place at the close of the year. A schedule for the main investigations required was prepared and necessary construction work assessed..

Svartsengi pumping station

Construction work on a pumping station for the runoff water from the power plant at Svartsengi began during the year and was completed by year-end. The pumping station makes it easier to control runoff flows from the plant’s production units and increases the capacity of the drainage system. The contractor was H.H. Smíði in Grindavík. 

A construction permit was obtained for a new re-injection pipe to the re-injection well north-west of Mount Sýrfell. Construction began mid-summer following a tendering process where the project was divided into numerous components such as foundations, pipes, earthworks, etc. Construction work is in full swing. The pipe is unique as the design contains a special arrangement for the steam pipe, allowing it to be covered with soil so that part of the pipe is underground. Verkís hf. designed the pipe. SET, Framtak, Ellert Skúlason and ÍAV are involved in the construction. 

Framework Programme

Work was spent on applications for HS Orka’s power development options in the third phase of the Framework Programme. All options that were discussed in phase 2 were reassessed and described again. These consist of production areas in Krýsuvík, with four sub-areas; in Eldvörp, with tie-ins to the Svartsengi area; and in Stóra-Sandvík, with possible tie-ins to the Reykjanes power plant area.

Geothermal in 3D

Utilisation of geothermal energy at Svartsengi has been on-going for over 30 years and has provided employees extensive knowledge and experience during that time. The geothermal plants were built in stages as knowledge of the system increased, providing a good example of successful geothermal utilisation. In conjunction with the plans for drilling at Svartsengi in 2015, the decision was made to embark on transferring the geothermal data into a 3D model. This work is still underway. 

Drilling of two high-temperature wells

The drilling of two high-temperature wells at Svartsengi is planned, and both will be located within the current production area. The first borehole is designed as an auxiliary hole that will be 2,000 m deep and will be directionally drilled to the south-east. The other borehole is designed as a deep exploratory hole and will be 2,500 m deep, directionally drilled to the east under the Grindavík road and Mount Sýlingafell. 

Re-injection

Re-injection at Svartsengi

300 kg/s

Re-injection at Svartsengi has been very successful. A total of 300 kg/s is injected into two holes located approximately 3 km south-east of the production area. Increased re-injection involves decreased disposal to the Blue Lagoon, and keeping the surface area of the lagoon within permitted limits has been successful.

Attention continued to be paid to gaining better knowledge about the geothermal system in the Reykjanes area. Efforts included investigations into the system’s reaction to the concurrent re-injection during production, updates of the geological model and updates of the stress model as well as the resource and calculation models. Extensive phase tracer tests were conducted in Reykjanes during the year, which confirmed that the liquids re-injected at the edge of the geothermal area travel approximately 16 m per day at a depth of over 2,000 m. 

Earthquakes measured

Ísor operates a localised earthquake measurement network in Reykjanes, with a total of seven stations, for HS Orka. Almost 1,000 earthquakes were measured within the geothermal area during the year, most of which were under 2 on the Richter scale. In addition, the boreholes in Reykjanes are monitored regularly. Such monitoring applies to aspects such as temperature, pressure, energy content, chemical content and deposits, as well surface level changes, distribution and subsidence. Activity in the Gunnuhver hot spring increased in September, with the spring moving over to an older pre-existing channel. This shows clearly how high-temperature areas can be dynamic and ever-changing.

Earthquakes on geothermal area 

1000 pr year

Extensive tests were carried out in borehole 33 in Reykjanes, which was drilled in the latter part of 2013 and is the first deep re-injection hole in Reykjanes. The borehole, located north of Mount Sýrfell, is over 2,500 m deep and is directionally drilled to the south. Calculations show that the borehole can handle around 100 kg/s of runoff fluid. At the close of the year, the drilling of borehole 34 began, which is the second deep re-injection hole in the area. The borehole is drilled just 15 m from hole 33 and will be approximately 2,000 m deep, directionally drilled to the north-west.

HS Orka, together with other energy companies and Jarðboranir, has developed new procedures in which drilling fluid (mud) and drill shavings are transported away from the site and disposed of in an accredited manner according to laws and regulations. HS Orka hf. has already used this procedure in the drilling of borehole 34 with excellent success.

Better utilisation

Research and experiments on the better utilisation of the geothermal fluid at Reykjanes have been carried out in an attempt to increase production without increasing extraction from the geothermal system. The first results appear promising, and the final results and proposals are expected in the first half of 2015. Air extraction experiments from boreholes have been carried out for over two years. The air is H2S-free and sufficiently clean that it fulfils standards for especially clean spaces such as surgical operating theatres and data centres. Preparations are now underway to exploit this method to ventilate computer areas and staff facilities at Svartsengi.

Resistance measurements have been carried out in Stóra-Sandvík, a likely geothermal system to the north-east of the geothermal area in Reykjanes. The measurement data will be interpreted in a 3D model, and the results are expected in the spring of 2015. The data will be used as the basis for making a decision as to whether to embark on further investigations in the area.

Research and development projects

HS Orka participates in various research and development projects. The Icelandic Deep Drilling Project (IDDP) continued preparations for deep drilling in Reykjanes. The extension of borehole RN-15 was specifically examined in this respect. Discussions were held with the Norwegian company Statoil as regards its re-involvement with IDDP. 

IMAGE and EU

HS Orka is party to a multi-national research project which is supported by the European Union’s (EU’s) 7th Framework Programme. The name of the project is IMAGE (Integrated Methods for Advanced Geothermal Exploration). The goal of the project is to develop new methods to investigate the deep roots of geothermal systems. Reykjanes is one of three high-temperature areas specifically examined. Installed were 30 sensitive seismometers on land and 24 in the ocean around the Reykjanes peninsula. 

Monitoring tectonic movements

Seismometers in total

84

With the addition of the meters already in place, therefore, there will be around 84 seismometers monitoring tectonic movements in the production areas of HS Orka for more than a year. It will be interesting to see the results of these measurements. HS Orka, moreover, participates in other research projects in co-operation with Icelandic and foreign bodies and companies and is also involved in the preparation of two EU applications to Horizon 2020, projects intended to develop better techniques for the drilling and processing of high-temperature areas..