Veitur Utilities operates thirteen district heating systems. The largest one is in the capital area, five are in West Iceland, and seven in South Iceland, see appendix. These utilities provide space heating and hot water services to 2/3 of the country’s population. In 2023, Veitur Utilities' production in low-temperature geothermal fields in the capital area and in distribution areas in South and West Iceland were in accordance with the company’s policy and objectives, and the statutory and regulatory framework.

Responsible consumption of hot water

In recent years, attention has been drawn to the fact that hot water for domestic heating is not an inexhaustible natural resource. People now realize better than before, that geothermal heat needs to be prioritized in favour of central heating for the quality of life in Iceland. During the cold season, Veitur Utilities have encouraged people not to heat their homes unnecessarily and to keep windows closed.

The Capital area

Due to the load during the cold season in January 2023, Veitur (the utility company) had to reduce hot water supply to major consumers in the capital area, namely all swimming pools and lagoons, as Veitur always prioritizes hot water for house heating.

During summer 2023, hot water from geothermal power plants was temporarily supplied to the entire capital area from June to September. This water exchange lasted for a longer time than has been done before. Consequently, the production in the low-temperature fields at Reykir, Reykjahlíð, Laugarnes and Elliðaárdalur, was eased, leading to increased winter reserves in those areas, please see chapter on innovation of climate and environmental issues.

Following the completion of a comprehensive review of plans for the future of the district heating system in the capital area, significant construction efforts have been undertaken to ensure the security of supply for the next decades.

In 2023, construction was underway on the fourth heating tank on Reynisvatnsheiði, where Veitur collects the hot water coming from geothermal power plants. This tank was put into operation in December 2023. Veitur also worked on renewing the main pipelines of the district heating system in Hafnarfjörður to increase flow capacity and meet the increased demand due to the growth in residential housing and the expansion of the town. This ensures all residents in Hafnarfjörður have access to hot water for the next decades.

In June 2023, the Nesjavellir hot water pipe was cleaned, the pipe is of the main flow routes for hot water into the capital area. The last cleaning of the pipeline was in 2003, and it was timely to clean it again to improve the flow capacity of the pipeline. The Nesjavellir pipe is about 30 km long and transports approximately 85-degree Celsius hot water from the geothermal power plant at Nesjavellir to the capital area. It was commissioned in 1990 and has a transport capacity of just over 1,700 liters per second. During this maintenance, was necessary to discharge about 60°C hot water to the surface. This was done in consultation with the Health Authorities of City of Reykjavík and the Reykjavík Environment and Planning Authority. In the spring of 2024, an assessment will be made of how the area has recovered and the need for repairs evaluated.

Looking ahead, there is a focus on increased heat production in the Hellisheiði Geothermal Power Plant as well as the planned HS-Orka power plant in Krýsuvík and new low-temperature fields in the Capital area. Eighteen thermal gradient wells were drilled in Kjalarnes at the end of 2022 and in 2023, and following the results, there are plans to drill two deep exploration wells at Brimnes, on the southern part of Kjalarnes, in 2024. Further thermal gradient drilling on the northern part of the peninsula will take place this winter. Subsequently, thermal gradient wells will be drilled in Álftanes with the aim of finding a suitable location for a deep exploration well.

Since 2018, research has been carried out on integration of the Reykjavik Capital region's heating utility system, so that it is possible to mix geothermal water from low-temperature fields with heated groundwater from geothermal power plants without the formation of scaling. The results are promising and have already been used for water exchange and summer rest in low temperature fields in the Capital area, please see above. It will completely change the operating system of the heat supply and the heat production of power plants towards a more sustainable manner. The research is scheduled to be completed in 2024.

West Iceland

The situation in the low-temperature district heating areas in Western Iceland is generally good. Although increased demand at Akranes and Borgarfjörður district heating (HAB) has exhausted all extra capacity in the system. A new production well at Hellur in Bæjarsveit is providing additional power to improve the situation. The aim is to look for hot water resources closer to the urban areas, but also to look for resources in Bæjarsveit and Kleppjárnsreykir rural areas.

South Iceland

Rangárveita district heating serves, among other areas, the urban areas of Hella and Hvolsvöllur. Early 2023, the pumping capacity was increased with a new deep pump in Laugaland to enhance the peak power of the district heating for those areas where demand is highest. Further projects are being prepared, such as improving the hot water flow capacity from Kaldárholt to Laugaland, increasing the reliability of supply in Hvolsvöllur, and searching for more hot water reserves. Eight thermal gradient wells were drilled near Laugaland in the summer of 2023, and there are plans to drill a deep exploration well in 2024. Discussions with landowners for research permissions at Ás and Hárlaugsstaðir took place in 2023, and it is planned to drill thermal gradient wells in one or both areas in 2024.

The drilling of a new well at Gljúfurárholt in Ölfus, at the end of 2023, appears to have been successful, suggesting that it is now possible to significantly increase the power capacity of the utility.