NORDURAL GEOTHERMAL ENERGY

Development of an existing geothermal field (Reykjanes) and construction of a new geothermal power plant with a capacity of 100 MWe. The project is located 25km south-west of Reykjavik. The promoter is the power, water and district heat utility serving the regions of Sudurne, Hafnarfjordur and Vestmanneyjar in the south-west of Iceland. It is intended to provide additional supplies of electricity to meet the projected growth in electricity demand in the region, mainly from an expanding aluminium plant, and for export to the national power grid.

The project concerns the development of indigenous geothermal energy resources to generate electricity and heat, thereby minimising the use of fossil fuels and emissions of air pollutants. The project aims at the cost-effective supply of power and heat to meet growing demand.

The project was subject to an Environmental Impact Assessment (EIA) in accordance with national legislation, which is based on the EU Directives 85/337 and 97/11 (the project falls under Annex II of Directive 97/11). The promoter prepared environmental impact statements (EIS), which were approved by the Planning Agency, after seeking public consultation and the opinions of the relevant competent authorities. Part of the geological formations concerned by the project are subject to special protection under national nature conservation legislation, however the EIA concluded that the project would not cause significant adverse impact.

The project will be implemented under a number of separate works, supply and services contracts, which will be procured in line with the requirements of the relevant EU Directive (93/38/EEC), including publication in the Supplement to the EU Official Journal. Details will be verified during appraisal. Tenders for the turbine/generator sets were submitted in February 2004.

Development of indigenous resources, regional and global environment including climate change.