Legal Framework and National Policy for Geothermal Development in Iceland

Abstract

In this paper, a description is given of the national policy, legal framework, official monitoring and accumulation of geothermal energy statistics in Iceland in a global context. The legal framework and amendments to the energy legal framework since 2010 will be reviewed. In particular the effect of Act for the Master Plan for the Utilization and Protection of Energy Resources no. 48/2011 which sets up the legal framework for the Master Plan which has been in preparation since 1999, where geothermal and hydro resources are categorized to be exploited, protected or further researched. It is the policy of the Government of Iceland to increase the utilization of energy resources and hence governmental support was increased for new geothermal based heat utilities by 50% even though 9 out of 10 households are heated with geothermal energy. The Icelandic National Renewable Energy Action Plan was published in year 2012 in accordance with Directive 2009/28/EC which outlines the strategy for 2020 and goals of geothermal utilization. In accordance with the plan, electricity generation from geothermal sources is estimated to increase by 12% from 5.2 TWh in year 2014 to 5.8 TWh in year 2020 and geothermal heat use from 28.1 PJ in year 2014 to 34 PJ in year 2020. Geothermal energy plays an important role in providing the nation with clean and reliable energy and is fundamental to the Icelandic economy as well as Icelandic welfare and independence. Effective policy making and official monitoring of geothermal development for sustaining a renewable energy society in Iceland is crucial for sustaining a long-term lifespan of the resource. Population growth is expected of 36% until 2050 and geothermal utilization is estimated to increase by over 70% until 2050 to almost 50 PJ.