Reykjavik Energy and Iceland Drilling Sign Largest-ever Geothermal Drilling Contract
Geothermal-based electricity generation to rise by more than 40%
Reykjavik, Iceland − Reykjavík Energy and Iceland Drilling (ID) today entered into a contract covering the drilling of geothermal wells in the Mount Hengill area, east of Reykjavík. This is the largest contract of its type ever signed in Iceland and probably the largest geothermal drilling contract every signed globally.
A massive increase in demand has led to an increase of more than 100 percent in geothermal-based electrical generation in Iceland since 2005, with total production reaching nearly 3,600 GWh last year. The new project covered by Reykjavík Energy’s contract with ID should increase generation about 40 percent more.
The project, which was tendered on the European Economic Area, covers the drilling of 50 wells in the Mount Hengill area. At ISK 13.4 billion, ID’s bid came to 90 percent of the cost estimate of ISK 14.6 billion.
Preparation for the project is to begin immediately, with commencing of drilling in March 2009. The wells drilled will supply steam for an expansion of the Hellisheidi geothermal powerplant as well as for the new Hverahlid geothermal powerplant.
Comments:
Mr. Hjörleifur B Kvaran CEO & President Reykjavik Energy & Reykjavik Energy Invest:
The net value envisioned from this project will be the foundation of vigorous economic activity and a range of new ventures in Iceland. At the same time, our aim is to harness these resources in a way that brings sustainable value to the country. We operate in a competitive market and try to meet our customers’ needs, but we must also carefully safeguard resources for future generations.
Mr. Bent S. Einarsson CEO & President Iceland Drilling
It has been a positive experience to work with Reykjavík Energy, and we welcome the challenge to demonstrate our capability on a project of this size. We are also proud of being a link in the value-added chain in which clean energy is transformed into a valuable export. Our expansion in Iceland in the past few years has helped us tackle challenging drilling projects abroad, which are a growing part of our operations and the marketing of our expertise. People sometimes forget how much Iceland depends on exports for its economic growth.
For further information, contact:
Gudmundur F Sigurjonsson, Phone +354 617 7713, email: gudmundur.sigurjonsson@rei.is
About Reykjavik Energy Invest
Reykjavik Energy Invest hf (REI) (www.rei.is / info@rei.is) is Reykjavik Energy’s international business development and investment arm. REI is a world-leading developer of geothermal power plants and geothermal-based district heating systems. REI focuses on creating partnerships to develop geothermal areas. Reykjavik Energy is the world’s leading authority in the utilization of geothermal energy and has consolidated its leadership over the past 60 years by supplying a large portion of the Icelandic population with geothermal water for domestic heating and by gradually developing new steam fields for power production.