Reykjavik Energy (RE) is responsible for about 19,000 ha of land, some 16,000 ha of which are protected. Please see appendix that contains a list of protected areas and the species of birds and plants on the 'Red List', whose local habitat is situated in these areas. Emphasis is placed on the protection and restoration of biological diversity and ecosystems as possible.

Biodiversity

Land reclamation and afforestation have been practiced on the lands of RE for over 70 years, since 1950. The goal was and remains to rehabilitate the land, improve and maintain it, restore natural birch forests, and the biological diversity of the sites. Over the past decade, the objective has also included carbon sequestration from the atmosphere into vegetation and soil. It is clear that enhancing biological diversity on RE's land has been a focus much longer than carbon sequestration in vegetation and soil. Biological diversity is and will continue to be part of the goals for nature-based solutions at the company.

Restoration and reclamation

Particular emphasis is placed on restoration and reclamation of the natural environment when work is done in areas where RE operates. This is especially true when it comes to minimising visual impact of power plants. Procedures and training for employees and contractors are revised and improved regularly in order to ensure even better conduct, e.g. in the protected areas. To reclaim disturbed vegetated soil, the vegetative cover is reserved and replanted. This is done in collaboration with licence authorities, and according to RE's objectives.

There are great synergies in simultaneously undertaking the restoration of natural ecosystems and actions that help us adapt to climate change, as well as implementing mitigationmeasures to reduce greenhouse gas emissions. RE has shown this in action in recent years by:

• Restoring degraded ecosystems as possible to their former state, e.g. at Andakílsá river in Borgarfjördur Vest Iceland, Árbæjarkvísl in Reykjavík City and in the Hengil area.
• Blue-green surface water solutions in urban areas in cooperation with local authorities

The benefits are much greater than only for the natural systems, as such actions also result in social, economic and health-related well-being.

Land reclamation, afforestation and rewetting of wetland

Most of the land reclamation is carried out on RE's own lands in Hellisheidi and in the Municipality of Ölfus, see map below. Furthermore, land reclamation is practiced on RE's own lands in the Nesjavellir area in Grímsnes- and Grafningshreppur municipality and in Andakíll in the municipalities of Borgarbyggd and Skorradalshreppur. These areas account for about 87% of all of RE's land reclamation areas. Land reclamation is also practiced on a smaller scale on state-owned land in Hellisheidi, where RE has a permit for operations, or about 8%, and land reclamation is carried out on Hamragilsland, which is owned by ÍR, or about 5%. All these areas were initially barren or sparsely vegetated areas, with less than 20% vegetation cover. About six hectares were restored with local vegetation at Hellisheidi and near Ölfusvatn in 2023, in line with the company's goals to expand land reclamation areas, sequester carbon, and support biodiversity.

All afforestation is carried out within RE's own lands, that is, in Nesjavellir and Ölfusvatn in Grímsnes- and Grafningshreppur municipality and near Elliðavatn Lake in Reykjavík City. Afforestation only takes place on land that is fenced off so that grazing animals are kept from the area. These fenced areas thus define potential planting areas. On the company's own lands, there are more areas that could potentially be fenced off and afforestation started in the future. About 6,000 birch and rowan trees were planted in approximately four hectares of land near Ölfusvatn in 2023. This aligns with the company's policy of expanding afforestation areas with native tree species, carbon sequestration, and strengthening biodiversity.

Rewetting of wetland was carried out on a 3.2 hectare area owned by RE in the Municipality of Ölfus in 2016. Upon inspection in the autumn of 2023, it was clear that the restoration had been successful. A specific study of the area will be undertaken in the summer of 2024 to confirm the results.

Hiking trails

For the last 30 years, Reykjavik Energy (RE) has overseen and maintained about 120 km of marked hiking trails at the Hengill area, going back to the start of operations at the Nesjavellir Geothermal Power Plant. Considerable increase in the number of hikers visit the area, and the area is very popular for hiking in all seasons. In the summer of 2023, hiking trails at Nesjavellir were repaired. The work will continue in the summer of 2024.

Reduction in moss damage at Hellisheidi

The Icelandic Institute of Natural History has been monitoring moss near the geothermal power plants in the Hengill area since 2012. Results from 2022 show that the frequency of moss damage, likely due to sulfur pollution, has decreased since 2017, see appendix. Additionally, the concentration of sulfur in moss near Hellisheidi Power Plant has significantly decreased. The moss cover is largely intact, except in isolated locations near Nesjavellir Power Plant. The emission of hydrogen sulfide at Hellisheidi Power Plant has greatly reduced after the abatement unit of the power plant was expanded in 2017, and it is likely that these results can be attributed to the reduced emission of hydrogen sulfide into the atmosphere. In 2025, it is planned to commission a new abatement unit at Hellisheidi which will clean nearly all hydrogen sulfide from the power plant, and in 2030 at Nesjavellir Power plant.

The ecosystem in Andakílsá is thriving

The ecosystem in Andakílsá has recovered after a significant amount of sediment entered the river during an inspection of the intake dam of Andakílsá Hydro Power Plant in May 2017. Approximately 177 salmon were caught there in the summer of 2023. About 15,000 smolts were released into the river in 2023, and 15,000 salmon smolts were placed in hatcheries. The project has been firmly established. Work on nature based solutions continued on riverbank protections at Andakílsá River in 2023, including the planting of birch and willow on the banks.

Following a risk assessment conducted in 2021 regarding the planned cleaning of sediment from the intake reservoir of the power plant, it is estimated that dam structures will be improved and the reservoir cleaned up to ensure safety, both for people and the environment, as the structures do not meet safety standards. Efforts to obtain the necessary permits are underway.

Water levels in Lake Skorradalsvatn and waterflow in Andaílsá River

The water level of Skorradalsvatn Lake fell below the reference levels for the first three weeks of 2023 due to severe frost period, see appendix. The flow in Andakílsá River was reduced according to recommendations from the Marine Research Institute. The water level of Skorradalsvatn Lake exceeded the reference levels by mid-February 2023 due to significant thawing. The flow of Andakílsá River was within reference levels except when it was necessary to reduce flow at the beginning of the year due to frost.

The Marine Research Institute is conducting studies on the effects of water regulation on the ecosystem of Skorradalsvatn Lake.

The ecological condition of Lake Elliðavatn is good

The findings of the Marine Research Institute's research on the ecosystem of Lake Elliðavatn indicate that the ecological state of the lake is very good according to calculations of the ecological quality ratio, which was based on available biological and physicochemical quality factors, see appendix. RE is preparing regular monitoring of the condition of the Lake Elliðavatn dam, including for seismic activity, and aims to have the monitoring in place by 2024.