Reykjavik Energy to spin out its geothermal Carbfix CO2 capture operations

Core from CarbFix site (source: CarbFix project, Orkuveita Reykjavikur)

Alexander Richter 27 Nov 2019

The Board of Icelandic geothermal operator Reykjavik Energy (Orkuveita Reykjavíkur, OR) has, subject to the confirmation of OR’s owners, agreed to establish a public limited company on the carbon binding method CarbFix, which has been successfully used at the Hellisheidi Geothermal Power Plant in recent years.

OR’s goal in separating the project from the core operations of Reykjavik Energy is mainly to:

• achieve greater success in climate, by allowing as many people in Iceland and abroad as possible to use the carbon reduction method,
• prevent growing activities around CarbFix from interfering with other research and innovation work within OR,
• delimit and mitigate financial risks for the OR Group’s basic services and
• protect the intellectual property rights of the project.

The prospective limited company will be wholly owned by OR.

Competitive cost

The CarbFix project was set up as an international scientific collaboration by OR, the University of Iceland and foreign scientific institutions in 2007. The method is still under development and OR is now leading two multinational research and innovation projects, which are offsprings of CarbFix; CarbFix2 and GECO. OR and its partners have received numerous international grants to develop the method, most of them from the EU research programs. Thus, the GECO project received about ISK 2 billion (around EUR 14.8 million) from the EU’s Horizon 2020 program. The aim is for the new company to apply for such contributions.

The cost of carbon disposal at the Hellisheidi Geothermal Power Plant with the CarbFix method is about ISK 3,000 (around EUR 22.2) per tonne of carbon dioxide. It is hoped that with the further development of the method and economies of scale, the cost can be even lower in many places, but this is often lower than the cost of buying allowances on the European market these days. The price is volatile but is now about ISK 3,300 (about EUR 24.4) per tonne.

Risk mitigation

The use of the CarbFix method has been of great interest with its adaptation to various industrial processes. However, investing in climate projects is not risk-free. Therefore, it is one of the goals of establishing a special company on the CarbFix method to limit the financial risk of OR’s participation as a clear mandate is given for cooperation in Iceland and abroad. OR proposes the company a minimum share capital, ISK 4 million (around EUR 30,000). Furthermore, OR guarantees the company’s operations on the basis of an existing operating plan for the first years. This is an expense that OR would have incurred, but the employees are expected to be five.

Brynhildur Davídsdóttir, Chairman of the Board of OR: “It is the pursuit of an equally successful research and innovation project as CarbFix. It has lived up to our brightest expectations of the success of the climate, and therefore it is not surprising that there is great interest in using the method in Iceland and abroad. Reykjavik Energy wants to respond to this demand as soon as it safeguards the Group’s core business, to generate energy and operate a supply system for the Icelandic public.

The climate threat is the subject of all mankind. As a member of a community of nations that supports the United Nations World Goals, OR believes that it is a social responsibility to pay the way most people use the CarbFix method. Therefore, the company we propose to set up for the project will not be profit-driven. We also do not expect to subsidize operations, as one of the main strengths of the CarbFix method is that the cost of implementing it is competitive with the price of allowances as it is today.”

Open educational meeting on CarbFix

The CarbFix project has received a lot of attention internationally. It has been promoted at the UN level, about the number of peer-reviewed articles in scientific journals and general international media has been lousy in discussing the project.

On Tuesday, December 10, the public will have the opportunity to find out what the project entails, how its operation has progressed and in what direction scientists are looking at these days. The meeting will take place at Orkuveita Reykjavikur’s premises at Bæjarháls 1 and will start with coffee and cookies at 04:00 pm to 06:00 pm.

Further information on the meeting can be found on Orkuveita Reykjavíkur’s Facebook page (in Icelandic).

Source: Mbl.is, Orkuveita Reykjavikur