Environmental, technical, economics and policy issues of the master plan for the renewable hydro and geothermal energy resources in Iceland

Iceland is blessed with renewable energy resources of hydro and geothermal energy. Only a portion of these energy resources has been harnessed so far. Further development of these resources will be a big challenge, consolidating various views. There is a range of environmental issues and concerns other than those concerned with energy utilization. In addition, questions relating to other aspects such as tourism and nature preservation have been raised by environmental groups. Such impact includes disruption of wilderness areas, preservation aspects, regional development, employment and other aspects. In 1999 the Government of Iceland initiated the project Master Plan (MP or Rammaaetlun) for the harnessing of Iceland's hydro and geothermal energy resources. The Ministry of Industry, in cooperation with the Ministry of the Environment, established a Steering Committee (SC) for the project. The role ofthe SC has been augmented by many experts in 4 working groups (WGs). The WGs' agenda have included: (1) Environmental questions, such as relating to nature, landscape, geological formations, vegetative cover, flora and fauna, as well as cultural heritage and ancient monuments. (2) The impact on outdoor life, agriculture, fishing in rivers and lakes, and hunting. (3) The economic impact of power projects on economic activity, employment and regional development. (4) Identification of potential power projects, both hydro and geothermal, with technical and economic evaluation of the projects. The Master Plan is a work in progress and its time frame and limit is uncertain with the phase 1 results presented in 2003. The new government, formed in Iceland in 2007, has declared that the plan should be finished before any new projects are initiated or investigated. To date, various tasks have been achieved, such as the multi-objective ranking of projects. In this paper we review the renewable energy resources of Iceland. Furthermore, we review the progress made so far in the MP in the light of conflicting views in Iceland relating to environmental issues and natural resource exploitation.