In 2023, the Reykjavik Energy underwent a year of transformation. New leadership took the helm, and a fresh direction was charted. The company now strides toward a sustainable future, acting as a driving force in a diverse collaboration aimed at enhancing the communities it serves.
Throughout the year, the concept of energy security gained deeper significance as the natural forces that play a major role in the quality of life in Iceland revealed their darker aspects. Addressing these challenges with foresight, just as our predecessors did, is essential to steer our nation to where we are today. The advancement of solutions, a core theme in Reykjavík Energy's new strategy, can unite us towards a sustainable future.
Reykjavík Energy has a long history. The water utility is over a century old, and the utilization of natural resources it provides, like fresh water, has simultaneously improved public health and been a pillar for a robust economy, especially in fish processing and other food industries. The sewage systems represent the other end of this service, where safe waste disposal without harming our environment is crucial. The electric utilities, initially starting with relatively small hydroelectric power stations, replaced oil lamps and coal stoves, and are now the foundation of many of the country's most powerful companies, pushing forward transportation means for even greater benefits for the climate and environment. The revolution caused by the district heating systems changed living conditions across the country. Today, nine out of ten Icelanders enjoy cost-effective geothermal heating in homes, numerous companies utilize geothermal energy in their production processes, geothermal bathing tourism is thriving, and swimming pool visits are an integral part of our national culture. The rapid technological development in recent years has also demonstrated how vital robust telecommunications connections are to our quality of life, essential in homes and absolutely indispensable in business.
This operation forms the core activity of Reykjavík Energy. The company has evolved significantly over time as the knowledge and skills of its staff have developed and been leveraged. RE has shared the knowledge gained from experience, often in public forums or through professional collaboration, and sometimes on commercial terms. The unique carbon capture method Carbfix, developed at the Hellisheiði Power Station, is an example of the latter, where the knowledge, diligence, and resilience of the staff, in cooperation with some of the world's leading scientists, have garnered well-deserved global attention, opening up corresponding business opportunities.
The generous nature of the earth is the foundation of many of RE's most important activities. Knowledge of and respect for nature are therefore core principles in all operations. For most of its history, RE has acted as a bridge between the resources and the communities it serves, where nature is one terminal and homes and businesses the other. This model has changed. Instead of a straight line from one point to another, we now envision a circle where nature nourishes the communities, which in turn nourish nature. This circle is not singular but includes countless smaller circles where the waste of one process becomes the raw material for another.
Building such a circular economy requires knowledge of the needs of communities – both homes and businesses – resilience, diligence, and not least, creative thinking. This is the work environment and culture RE aims to create with its staff. It also relates to how the company is equipped to adopt the latest technologies in its services, the use of extensive data for automatic control of complex and large utility systems, power plants, telecommunications systems, and carbon capture, and the application of artificial intelligence where it is most suited. How technology is best utilized is based on knowledge, ingenuity, and creativity of people, and the innovation joy of the staff. In Reykjavík Energy's new overall strategy, one main emphasis is on performance-oriented teamwork, assuming it will be maintained with RE's continued leadership in gender equality and ensuring the talents of the staff are utilized in a safe and inclusive workplace.
Many of RE's staff and subsidiaries work in dangerous conditions. High-voltage electricity is often nearby, as is hot water or even hotter steam, and deep trenches are frequently close to fast traffic. RE has a clear policy for a workplace without accidents and does much to enable staff to take responsibility for and manage risks in their environment. There will be no relaxation in these efforts as people's lives and limbs are at stake.
Safety is paramount in our minds, especially when the downside of the gift that geothermal energy presents made Grindavik uninhabitable, at least for a while. Lives have already been lost, and thousands more have been significantly disrupted.
Reykjavík Energy is among the world's largest geothermal companies, and its main source of energy is the Hengill area with the namesake volcano. Energy security, therefore, took on a deeper meaning in our minds with the volcanic activity on the Reykjanes Peninsula. Repeated evacuations of our colleagues from the Svartsengi geothermal power station during seismic or eruption periods and the fear of a hot water shortage even across all of the Reykjanes Peninsula have sharpened our focus on the need for more comprehensive emergency response plans than have been made to date. The role of home heating in the nation's energy security cannot be overstated.
In the general discussion in 2023, energy security was often linked to electricity issues. This discussion is also urgent. Climate-friendly energy transitions from fossil fuels require electricity, and Orkuveitan will participate in generating it. Mid-2023, OR presented several options for increasing energy production from wind in Southwest Iceland, and later in the year, plans for cooperation with the Ölfus Municipality on geothermal energy utilization in Ölfusdal were announced. Although there has been no shortage of declarations of intent for reforms in the laws and regulations governing power plant operations and ideas about successful paths forward, actual reforms have stalled. Meanwhile, fears of energy shortages are growing.
One of OR's roles is to produce and sell electricity. With the technology we know today, electricity will play a key role in replacing fossil fuels where they are still in use. In some cases, electricity is used directly, in others in batteries, and in some cases in chemical processes to create fuel alternatives.
The energy transition is one of the biggest and most important tasks in human history.
It is both complex and urgent. However, the term "energy transition" does not adequately describe the opportunities available to us as a society. This is about changing production methods, transportation, lifestyles, and finding new ways to propel societies forward to greater success – in harmony with nature.
We are not merely replacing fossil fuels with sustainable energy sources but also creating derivative products, new business opportunities, and improved energy efficiency. This leads to new companies and jobs that increase our economic growth and competitiveness as a nation.
The effects reach beyond our borders.
Therefore, it might be more appropriate to call this the current reversal, not the energy transition. It better captures the revolution and the multiplicative effects that Icelanders can reap. After all, we have the opportunity to multiply the value we derive from energy… for the environment, for the business sector, for the financial sector, for society, for Iceland's image, and for the community as a whole.
We at Orkuveitan are ready to face the challenges that Iceland and the entire world are facing.
Reykjavík Energy's ambition is to work energetically in collaboration with others, in energy, utilities, and related innovation, so that RE and its customers can support the sustainable development of society.
RE's ambition is directed towards providing exceptional service to a diverse clientele; operating in harmony with the earth's nature, a responsible team spirit, efficient governance, and ensuring that all operations contribute to prosperity. We want to be a good business partner. The success of our partners is our success.
Thus, Reykjavík Energy becomes a driving force for a sustainable future; a trustworthy company with a healthy operating surplus and built on responsible operations.
