A Geyser Of Geothermal Energy  

I'm still tracking news about geothermal energy in the background - here's a little roundup of new stories.

The Sunday Oregonian reports that "pressure is building" for goethermal energy in "Get ready for a geyser of geothermal power".

Oregon has seen geothermal projects on the drawing board before, but several now appear to be moving toward reality. That's in part because rising costs of other types of power make geothermal more attractive and because improved technology allows plants to produce power from lower-temperature geothermal reservoirs than before, experts said. At least three companies are planning geothermal power plants in Oregon, and one could be producing electricity in less than two years, officials said. The recent failure of Congress to extend tax breaks for renewable energy makes financing the plants more challenging but should not derail them entirely, officials said.

Slate reports that Iceland has power to burn.

Iceland's economy, which until recently relied largely on fishing, has diversified in recent years, with rapid growth in tourism, manufacturing, and financial services. And like the Blue Lagoon, much of the growth has been a happy byproduct of Iceland's decadeslong strategy of tapping sources of renewable energy. Mindful of climate change and the need to limit emissions, many U.S. states have set goals of obtaining 10 percent or 15 percent of their energy from renewables at some point in the distant future, and the European Union has pledged to reach 20 percent by 2020. But Iceland is already at about 80 percent. All electricity on the island is generated through geothermal or hydroelectric sources—low-emissions sources that don't use fossil fuels. Most homes are heated by water pumped from geothermal hot spots. "We are blessed with a lot of clean and renewable energy," Prime Minster Geir H. Haarde told Newsweek. "The only uses of fossil fuels in Iceland are people using cars and the fishing fleet." And increasingly, Iceland, whose most prominent exports have been haddock and Björk, is devising ways to export what has been a stranded resource.

IceNews reports that Al Gore is to speak at Glitnir climate conference in Iceland.

Nordic bank Glitnir and the University of Iceland will host an open meeting with Al Gore in Reykjavik in April. Al Gore, the former vice-president of the United States and Nobel Prize winner, will be the keynote speaker at a meeting on environmental issues scheduled to take place at Haskolabio in Reykjavik on 8th April.

Larus Welding, CEO of Glitnir Bank, said the meeting with Al Gore is related to Glitnir’s overseas efforts to promote the bank’s expertise in sustainable energy. “Glitnir is at the forefront in international financial services for geothermal energy projects. We are already engaged in a number of exciting ventures in the U.S. with leading companies in this field. The Bank has obtained considerable attention among numerous parties who are participants in the public discourse on sustainable energy resources, one of them being Al Gore,” said Mr Welding.

Mr Welding said the meeting with Al Gore is important in light of Glitnir’s progress in the field of renewable energy resources, which offer numerous opportunities particularly with the record-high oil prices seen in recent months.

A fairly large proportion of geothermal stories in the news stream relate to efforts by Iceland based companies like Glitnir Bank to export geothermal power technology and expertise offshore - particularly to the US and developing nations.

All Africa.com reports that Iceland is helping Ethiopia explore geothermal power.

Following the signing of a bilateral relation agreement between Ethiopia and Iceland on January 2008 to explore geothermal power potential in the rift valley region, a team of experts from Reykjavik are to engage in a bilateral geothermal survey. It would be too early to talk about the project cost, said Sendeku Araya, public relations division Head at the Ethiopian Telecommunications Corporations (EEPCo). "Ethiopia has an estimated potential of 1000mw of power from geothermal energy located in the rift region," ambassador Svavar Gestsson, especial envoy to the ministry of foreign affairs, told Fortune. He said the exact potential would be known after the actual study is conducted.

IceNews reports on a Electricity agreement signed between Yemen and Iceland.

emen’s General Corporation for Electricity and Iceland’s Reykjavik Energy Invest company signed a new agreement on Sunday, according to reports by Saba, Yemen’s news agency. The document signals a new agreement on electricity generation between the two countries. The agreement details a plan for REI to lead a study into the geothermal potential at Lesi Mountain in the Dhamar region of Yemen. If the potential for a geothermal project is there, REI will initiate drilling works in the location. According to the document, REI will invest in the first geothermal station after the study is finalised, which is expected to occur by the end of August this year.

Like Iceland, Yemen is increasingly using renewable sources of energy such as geothermal energy, wind power and solar power. Iceland’s minister expressed his willingness to assist Yemen in the expansion of their renewable energy sources. Iceland is considered the foremost expert in geothermal operations and is the country with the most electricity generated from renewable resources.

Cleantech.com reports that Glitnir is bringing geothermal power to India.

The bank is teaming up with India's LNJ Bhilwara Group to explore the country's untapped potential. Reykjavik, Iceland-based Glitnir Bank is continuing to spread the word about geothermal, announcing a joint venture today for exploration in India. Glitnir is partnering with Noida, India's LNJ Bhilwara Group, a diversified business with operations in power generation.

Wired reports that Iceland is a compelling location for data centres because of the climate and cheap renewable energy availability (though network connectivity could do with a boost).

Quick -- what's the first thing you associate with Iceland? Glaciers and blondes, right? According to a PricewaterhouseCoopers study (and some lobbying from the Invest in Iceland Agency), the country should be associated with data centers.

Not only is the Nordic country an ideal choice for toasty data centers with its chilly climate, but the geothermal and hydroelectric power sources could keep the electricity bills low. "The study showed that Iceland offers a lower cost for data centers than the US, the UK and even India," boasted an Agency spokesperson. "Iceland also has the second lowest corporate tax in the OECD at 15 per cent, highly skilled IT labor at competitive prices, and low land and lease costs."

Business Green has a look at recent economic uncertainty and the country's potential to become a leader in clean energy technology.

It is somewhat ironic that of all the countries currently struggling with the prospect of an economic downturn it is the one arguably having the toughest time that ultimately has the least to worry about when it looks to its long-term future.

Over the past few weeks, Icelanders have had to become used to their country making a series of unwelcome appearances on the world's business pages. Commentators have wondered aloud if this small northern economy of just 300,000 people could be the first to collapse as a result of the global credit crunch.

Despite a fundamentally strong economy that has in recent years propelled Iceland to the top of the UN's quality of life rankings, the country's banks have been hit hard by the recent drop off in investor confidence and have struggled to obtain foreign currency loans.

The net result has been an economic car crash. The central bank last week raised interest rates for the second time in three weeks to a record 15.5 per cent. This was in an attempt to head off spiralling inflation and shore up the Krona following a start to the year that has seen it lose a fifth of its value against the Euro. Meanwhile, the finance ministry is now predicting that the economy will contract next year for the first time in over 15 years as high interest rates put the brakes on consumer spending.

And yet, while it may prove of little consolation to those Icelanders facing a tough couple of years, many within the Icelandic government believe the country's recent travails are the precursor to a long-term economic boom that should make Iceland a global trailblazer in the development of clean technologies.

Cryptogon recently pointed to an FT article on "crashing iceland" - "Allegations that Speculators Are Colluding, Attempting to Crash Iceland for Profit".

An executive who works with a big Icelandic bank recalls: “Upon entering the bar I was approached by one of the hedge fund managers. He informed me that all people in this party – except for him, of course – were shorting Iceland.” The executive says the fund manager described Iceland’s profit-making potential as the “second coming of Christ”.

“As dinner progressed – some people actually decided not to eat at all but just sit at the bar – and more drinks were downed, the conversation and questions started to get more hostile and short positions openly declared,” the executive says.

What started as an alcohol-fuelled evening has become a full-blown investigation by Iceland’s Financial Supervisory Authority into an alleged speculative attack by hedge funds on Iceland’s currency, banking system and stock market. Jonas Jonsson, director-general of Iceland’s FSA, says the authorities are “searching whether some parties have systematically been distributing negative and false rumours about the Icelandic banks and financial system in order to profit from it”. ...

The suspicion is that speculators exerted undue pressure on the illiquid CDS market in the knowledge that the wider the spread went, the more fear of a banking collapse would contaminate the stock and currency markets. There are also concerns about the way rumours were spread about the alleged reliance of Iceland’s banks on internet deposits, which triggered reports in UK newspapers that such deposits could be withdrawn rapidly.

The chief executives of the three main banks, Landsbanki, Glitnir and Kaupthing, made clear in interviews last week there is no evidence this is the case, despite the negative publicity about Iceland. They firmly believe such rumours were started deliberately in order to spark fears of a run on their overseas deposits. Iceland’s most senior officials have declared open war on the speculators. David Oddsson, governor of the central bank and former prime minister, says: “There is an unpleasant odour of unscrupulous dealers who have decided to make a last stab at breaking down the Icelandic financial system.” ...

These events serve as a testament to Iceland’s transformation from fishing-based backwater to northern European tiger economy. Icelanders have certainly grown richer. Its economy may be the smallest in the Organisation for Economic Co-operation and Development, with a gross domestic product of about $20bn (£10bn, €13bn) but GDP per capita income is approximately $60,000, among the highest. Private jets swoop into Reykjavik’s airport bearing home-grown billionaires, while black Range Rovers purr through the capital’s streets amid a forest of cranes.

These sorts of stories remind me of a mockumentary made for British TV a few years ago called "The Man Who Broke Britain". I've never managed to get hold of a copy, but it sounds like it was quite well done (at one point I believe it was going to be ditched because of the controversial subject matter, but the online articles don't mention this).

The Man who broke Britain is a full-length drama film made by the BBC in 2004. The film was written by Simon Finch and Gabriel Range, produced by the former and directed by the latter. It is shot in documentary-style - very convincingly so - and is part of their "What if..." series of programmes, in which the BBC highlight potential problems, disasters and other current affairs issues which could conceivably impact our lives.

In this particular programme, the topic is the global and local economy. The whole concept of the film hinges on the concept of financial derivatives - one of the things that caused Enron to eventually bite the dust.

"Financial derivatives" is a bit of an obscure term for the layman. As the film explains it: "Two parties take out a contract, and they agree they will exchange moneys based on the change in value of that asset. It moves up or moves down. One of them wins, one of them loses, it's as simple as that"

This documentary (or mockumentary, rather, considering it is set in the beginning of 2005) is extremely convincingly shot. The actors, the story-line, the way it is produced, everything seems extraordinarily well thought through and the characters in the film are most believable. The filmmakers have also managed to deftly include footage of both the British prime minister Tony Blair, and US president George W. Bush, combined with real news footage and lots of convincing stock footage, for further realism.

While painting a bleak picture of the world, basically leading through a global financial collapse, not unlike the depression of the late 1920s and 1930s, the programme raises a series of points for discussion.

In the film, a rogue financial derivative trader has foiled the system, and has included a phrase in contracts that makes the banks extremely vulnerable to certain conditions - in this case, if the oil price rises to extreme levels. Of course, the trader is in cahoot with terrorist organisations, who use violent acts of terrorism to drive the price of oil up. When it reaches the magical limit, a major bank topples, and takes a large portion of other financial institutions with it.

While mostly an exercise in "what if", the film raises a series of important questions about the ethical aspects of banking and financial institutions. It is easy to imagine this film being used as a basis for discussion in ethics- and perhaps also in macro-economics classes.