NESJAVELLIR GEOTHERMAL POWER III

Extension of the existing Nesjavellir geothermal cogeneration plant, located 25 km east of Reykjavik, by 30 MWe and 150 MWth, based on the results of a renewed assessment of the geothermal field.

The project concerns the further development of indigenous geothermal energy resources to generate electricity and heat, thereby minimising the use of fossil fuels and emissions of air pollutants. The capacity extension is aiming at the cost-effective supply of power and district heat to meet growing demand. It is also fully in line with the Bank’s policies on sustainable development (cogeneration of heat and power; renewable energy).

The project, which would fall under Annex II of EU directive 97/11, is located in an isolated, unpopulated area on the slopes of the Hengill volcano. The competent government authority has ruled that a full environmental impact assessment (EIA) is not required in this case. The results of the EIA previously carried out for the existing plant and any environmental studies relating to the current extension will be reviewed during appraisal, including the potential impact on any nature conservation sites.

The promoter employs procurement procedures in line with the relevant EU Directive (93/38/EC), including the publication of tender announcements in the EC Official Journal. Given technical requirements to ensure standardisation of equipment design at the power plant, contracts for supply of the main equipment for the power plant extension have in this case been negotiated with the suppliers of the equipment originally installed, who were selected by open tendering procedures carried out in 1997.

Environment.