Iceland is situated in the North Atlantic ocean just south of the Arctic Circle and is the westernmost country in Europe. It is the second largest island in Europe after Britain, measuring 103,000 square kilometres in area, but home to a relatively small population of around 280,000 concentrated around the coast. The interior of the country is largely arctic desert consisting of mountains, glaciers and volcanoes. Iceland lies on the Mid Atlantic Ridge, where the North American and Eurasian continental plates are slowly moving apart. As a result, Iceland has a high level of volcanic activity and is home to a higher concentration of hot springs and other high temperature seismic features than anywhere else on the planet.
These natural phenomena have been well exploited by the Icelandic people. During the 1950s the country began to reduce its reliance on fossil fuels by moving from oil based power plants to hydroelectric and geothermal energy production. At present, ninety per cent of the countrys buildings are heated with geothermal energy and hydro energy is used to produce electricity for buildings. In total around two thirds of the nations energy needs are produced from renewable sources. It is estimated that this uses only two per cent of the available geothermal energy and a quarter of the potential hydrothermal energy, meaning that there is a huge energy reservoir waiting to be exploited.
Despite this wealth of natural resources, Iceland still relies on imports of expensive fossil fuels for the remaining one third of its energy needs. Indeed, the country spends $150 million a year on oil, most of which is used to run its large transportation and fishing fleets. The fishing industry accounts for around 65 per cent of Icelands exports and the profitability of this business, and the wider economy, is intrinsically linked to the price of oil. If the oil price goes up, fish prices must inevitably rise and exports drop. If the country could reduce its reliance on oil then it would be in a far stronger position to compete in the international market.
Iceland has another compelling reason to want to reduce its consumption of fossil fuels: pollution. Carbon dioxide emissions from trucks and fishing boats, along with a burgeoning metals production industry, make this island nation one of the worlds largest per capita emitters of this greenhouse gas. For this reason, Iceland is one of the few industrialised countries to have not yet signed the Kyoto Protocol on climate change.
For these reasons, the country is firmly committed to moving away from fossil fuels altogether, and fuel cells have a pivotal role to play in this plan. The government has a vision that in the not too distant future all vehicles and industry on the island will be powered by fuel cells running on hydrogen generated from the electrolysis of water using surplus geothermal and hydroenergy. If this is achieved, Iceland would be the first country to move from a carbon based energy infrastructure to a hydrogen economy, and it hopes to accomplish this by 2030.
To realise this goal, a consortium entitled Icelandic New Energy Ltd was set up in 1999. The majority shareholder is an Icelandic holding company named Vistorka H.F. which is owned by a number of public and private enterprises and institutions with an active interest in the research, development and financing of new industrial projects in Iceland. These include the University of Iceland, the Reykjavik Municipal Bus Corporation, and the Technical Institute of Iceland. The remaining partners are DaimlerChrysler, Norsk Hydro and Shell Hydrogen.
These international companies have pledged their support because they recognise that there are a number of reasons, besides the abundance of natural resources, why Iceland is an ideal test bed for the transition to hydrogen. These include:
- The full backing of the Icelandic government.
- A population receptive to new ideas and technology.
- Experience in changing from one fuel source to another: after the second world war Iceland moved from coal to oil and then during the 1950s began the transition to renewable energy sources.
- An island geography which means that the whole energy network is isolated from outside influences.
- A similar transportation system and infrastructure to other industrialised countries so the results of this experiment can easily be adapted for use in other regions.
- A relatively small transport fleet to use as a basis for planning and monitoring experiments. In Reykjavik, three buses account for 5 per cent of the total fleet, a far higher proportion than in other major cities, meaning that valuable results can be obtained for minimal capital outlay.
One of the first practical ventures to be born from this collaboration is the ECTOS (Ecological City Transport System) project which will be run by Icelandic New Energy, supported by European Commission funding. The aim of ECTOS is to develop the infrastructure and expertise needed to manage a fuel cell powered transport network and run a demonstration bus service. During 2002, three Mercedes Benz fuel cell buses are expected to begin to run on an existing commercial route for the Reykjavik Municipal Bus Company. They will be refilled at a specially built Shell hydrogen filling station where the hydrogen will be generated on site by the electrolysis of water using renewable energy.
If this demonstration is successful then phase two of the project will be to convert the rest of the countrys bus fleet to run on fuel cells. This will then be followed by the introduction of fuel cells into private vehicles. The final goal would then be to convert all of Icelands fishing vessels to run on fuel cells and completely break the reliance on imports of fossil fuels.
This project is of course a huge undertaking and it is likely to take many years to realise even part of the very ambitious goal that Iceland has set itself. However, if the country does succeed, even partially, it will have positioned itself at the forefront of a potentially huge technological, environmental and economic breakthrough. As well as the many domestic advantages that will follow, Iceland could be poised to reap far more widespread rewards.
Even if all of Icelands 180,000 vehicles and 2,500 fishing vessels are converted to run on hydrogen, they will still consume less than 10 per cent of the countrys economically available renewable energy. This will leave a huge untapped resource that that could potentially be harnessed to generate hydrogen which could then be shipped around the world to other regions beginning to rely on the emerging hydrogen economy. By the end of the century this small island nation may have repositioned itself as a major player in the international energy market.