Energy supply on the Faroe Islands – Trap The Faroe Islands

With a battery system specially developed for the Faroe Islands’ electricity system, SEV’s wind farm in Húsahagi outside Tórshavn marked a significant step forward in the green transition. ÓLAVUR FREDERIKSEN, 2019

From ancient times, peat has been cut, dried and used as fuel for heating and cooking. Driftwood was also used for that purpose, while whale oil and later kerosene were used for lamps. Peat was cut up well into the 20th century, when coal, coke and oil – especially kerosene – had become common fuels.

At some point, a significant part of the coal consumption came directly from coal mines in the northern part of Suðuroy, where mining activities have been carried to some extent since about 1770. Coal mining has mainly taken place in the mines in Prestfjall and Rókhagi in the village of Hvalba, where coal is still mined in limited quantities. In addition, there have been coal mines in the village of Fámjin and in Rangabotnur by the village of Trongisvágur, which is part of Tvøroyri, the largest town on Suðuroy. Coal mining on Suðuroy had a special significance during World War II. Coal seams are also found on Mykines and Vágar, but it has not been profitable to extract coal.

In the late 1800s, development in the electrical field, both within water turbines and electricity transmission over long distances, had gained traction in both industry and in private homes abroad. This also inspired the inhabitants of the Faroe Islands. The businessman and pioneer Ólavur á Heygum made the first experiments with hydropower in Fossá in the village of Vestmanna in 1907. He fought for the hydropower project which was to produce electricity for Vestmanna, but did not get funding for the project before his death in 1923.

Coal miners in the coal mine at Hvalba on Suðuroy in 1946. Hvalba has had mining operations since the 18th century. ERIK PETERSEN/RITZAU SCANPIX

FACTS ABOUT THE ELECTRICITY SYSTEM 
The Faroe Islands’ electricity system has a total production capacity of 165.75 MW. 

Hydropower: 40 MW 
Wind power: 24 MW (and 60 MW in 2022) 
Oil plants: 100 MW 
Solar power: 0.25 MW 
Biogas: 1.5 MW 

The high and medium voltage network extends over 1,000 km. 
At the end of 2020, there were 26,175 electricity meters in the country, 20,570 of which were installed in households.

The first power plants

After Heygum’s experiment with hydropower in Vestmanna, an initiative was also taken to utilise hydropower on Suðuroy. The first hydropower plant in the Faroe Islands was built in the Botnur valley west of Vágur on Suðuroy. The hydropower plant in Botnur was commissioned on 18 July 1921 and is still in operation. In the same year, an oil plant started producing electricity in Tórshavn. Ten years later, in 1931, the next hydropower plant started in Klaksvík.

In the first half of the 20th century, several private initiatives were also taken to start small power plants, both oil plants and hydropower plants with small turbines. These could produce electricity for individual households, small buildings or neighbourhoods.

As electricity became increasingly important, 19 municipalities took the first step towards an intermunicipal electricity company, which was to supply the three largest islands, Streymoy, Eysturoy and Vágoy – hence the name SEV – with electricity from hydropower from dams in Vestmanna. The electricity company was founded on 1 October 1946, and in December 1953, the Fossáverkið hydropower plant began production. In the following years, all municipalities joined SEV, which took over the old power plants and which is still responsible for the electricity supply. Thus, the company is jointly owned by the municipalities.

Oil companies in the Faroe Islands

The oil companies Shell and Esso entered the Faroese market in the first half of the 20th century, where they supplied oil as the most important energy supply for heating and transport as well as for business. As part of the international Shell Group, Dansk Shell was for a long time the sole shareholder of Føroya Shell. Likewise, through its activities in Scandinavia, the American oil company Esso was the owner of Esso Føroyar, which was later acquired by the Norwegian Statoil. A smaller Faroese company, Oljufelagið Føroyar, was founded in the 1980s as a counterweight to the big oil companies, but it was also later acquired by Statoil.

In 2007, the ownership of the Faroese oil market changed again. The Icelandic energy company Skeljungur acquired Føroya Shell, which changed its name to Magn. Skeljungur currently owns 48 % of the share capital. At the same time, Statoil ceased its activities in the country, and they were taken over by the newly founded 100 % Faroese-owned company Effo.

As a result, a duopoly has existed in the Faroese oil market since the first half of the 20th century. The two major oil companies have started to reorganise in a time with a focus on green energy. They want to participate as energy companies with wind power and other renewable energy solutions.

Vision 2030

In 2009, the Løgting for the first time adopted a climate policy that focused on reducing CO₂ emissions and initiating the electrification of society where possible, and on increasing electricity production with renewable energy. In 2011, the Ministry of Economic and Business Affairs prepared an energy policy report stating that one of the main objectives was to electrify all energy consumption on land with more renewable energy. The subject was further discussed in the Virkisætlan action plan from January 2015 on the future electricity system in the Faroe Islands.

In continuation of the climate policy and the energy policy report, in 2014 SEV published its vision that all electricity on land must come from green energy sources by 2030, called Vision 2030. The vision was later supported by the Faroese Government in the coalition agreement after the general election in 2015, and since then all parties – the electricity sector, authorities, politicians and businesses – have worked towards the green transition in Vision 2030. However, they do not always agree on how the goal is to be achieved and how quickly all energy consumption can be converted to green energy.

In the long term, the overall green conversion covers less than half of energy consumption, since the conversion of shipping and air traffic to green energy is a separate issue that researchers all over the world are struggling with. However, the authorities are focusing on the maritime sector in the hope that the global development in this area will mean that a large part of the energy here too will eventually be able to come from renewable energy sources.

According to SEV’s calculations, the need for electricity on land will be about 700 GWh in 2030 as a large part of transport and heating will by then have been converted to green energy solutions, which must be supplied with electricity. These calculations do not include a green transition in the industry. This means that electricity consumption will increase by about 133 % in the period 2015‑30 – from 300 GWh in 2015 to 700 GWh in 2030. The figures are, however, conditioned by the development of society in general.

At the end of 2020, a total of 321 electric cars were registered, which is an increase of 302 cars compared to five years earlier, when at the end of 2016, a total of 19 electric cars were registered on the islands. The number of heat pumps for houses and buildings was estimated at over 1,000 at the end of 2020. The number of applications to the energy authorities for permission for geothermal heating went from two per year in 2012 to 235 in 2020 – a total of 803 applications in nine years.

Energy supply in 2020

The Faroe Islands’ first hydropower plant in Botnur west of Vágur on Suðuroy was commissioned on 18 July 1921. The power plant still accounts for part of the electricity production on the islands. ÓLAVUR FREDERIKSEN, 2017

The Faroe Islands’ total energy consumption on land and at sea is distributed mainly between ships, transport, industry, heating and electricity consumption, a total of about 3,800 GWh in 2020. In the big picture, oil accounted for 92 %, while 8 % came from green energy sources on land, mainly hydropower and wind energy but also energy from waste incineration. Ship traffic accounts for 41.3 % of total energy consumption.

The electricity consumption of 407 GWh was 10 % of the country’s total energy consumption in 2020, and about 38.7 % of electricity production came from renewable energy sources, mainly hydropower and wind power – but also with small contributions from biogas (0.34 %) and solar energy (0.04 %). The remaining 61.3 % came from the oil-fired plants. In comparison, about 40 % of electricity in 2015 came from oil, while about 60 % of the electricity was produced using hydropower and wind power, which was a record for green energy in the electricity sector.

In the period 2016‑20, a decline was seen in green electricity production, where the percentage distribution between oil and green energy sources came right down to the 2005 level. In 2005, the total electricity production was 245 GWh, spread over around 45 % renewable energy and around 55 % oil.

During the period, however, the Faroe Islands experienced rapid development in the fishing and salmon industry, great activity in the building and construction industry as well as substantial growth in population, which together contributed to an unusually high demand for electricity. For many years, the so-called normal growth in electricity consumption was 2‑3 % per year, but during the period 2017‑20, electricity consumption increased by over 5 % annually – albeit with an extraordinary growth of 9.7 % in 2019. At the same time, it has not been possible to sufficiently expand the green energy sources for electricity production in line with the increased electricity consumption.

Although the green production figures have been decreasing, five green energy sources were part of the Faroese electricity production in 2020 – hydropower, wind power and biogas, as well as solar energy and tidal energy on a trial basis.

Green energy sources

When SEV was established in 1946, the primary goal was to produce electricity with hydropower. Social development in the 1970s, however, made it necessary to expand with oil-fired plants. The company again expanded hydropower over a period of 30 years – from the early 1980s to 2013.

During this period, wind energy also became relevant in the Faroe Islands, and SEV made the first early experiments with wind power in Neshagi on Eysturoy in 1993. In 2003, the company entered into a partnership with the private company Sp/f Røkt, which set up three wind turbines in Vestmanna. In 2005, SEV installed three wind turbines in Neshagi, which were replaced by five new ones in 2012.

In 2014, SEV built a relatively large 11.7 MW wind farm of in Húsahagi outside Tórshavn with an associated battery system to stabilise the unstable wind power fed into the Faroese electricity grid after seconds or minutes. The battery system was developed specifically for the islands’ electricity system in a collaboration between SEV, the German wind turbine manufacturer ENERCON and French Saft Batteries.

The experience gained from the battery system in Tórshavn forms the basis for the new 6.3 MW wind farm in Porkeri on Suðuroy, where production started in November 2020. The battery system has capacity to store the unstable wind energy for up to half an hour and transform it into stable energy for consumers, which is a major advance.

In 2020, there were four wind farms on the Faroe Islands, of which SEV owns three, and Sp/f Vindrøkt, in which the oil company Effo owns half of the share capital, owns one. SEV is building another 18 MW wind farm at Eiði on Eysturoy, the oil company Magn is building an 18 MW one in Flatnahagi outside Tórshavn, and Sp/f Vindrøkt is behind a 25.2 MW wind farm in Hoyvíkshagi outside Tórshavn. These are planned to be commissioned in 2022.

According to the Electricity Supply Act, SEV is responsible for the electricity system, while electricity production – especially wind power – is put out to public tender, with the main aim of keeping production price at the lowest level possible. After a long period of investigations, the energy authorities have formed the basis for the production of biogas in the Faroe Islands. The largest salmon farming company, Bakkafrost, has subsequently also become involved in green energy with the biogas plant FÖRKA outside Tórshavn, which was put into operation in 2020. FÖRKA uses waste from the salmon industry, fish factories and agriculture in its production. The new biogas plant started supplying electricity to SEV in September 2020, and during the period September-December 2020, FÖRKA produced 1,357 MWh – equivalent to the electricity consumption of 1,200 households.

In December 2019, SEV put a solar plant into operation on a trial basis in Sumba on Suðuroy, which in 2020 produced 170,000 kWh for SEV – equivalent to the electricity consumption of 35 households – and the data collected corresponds to expectations. The production is about 80 % of what it is in Denmark.

In 2020, SEV also launched an experiment with tidal energy in Vestmannasund together with the Swedish company Minesto. Two of Minesto’s Deep Green dragons are chained to the seabed and float around in a figure eight in the water, generating electricity. It was a historic event when, for the first time in November 2020, it was possible to produce electricity from tidal energy.

Electricity system balance

Due to its isolated location in the North Atlantic, the country cannot, like Denmark for example, buy electricity from neighbouring countries. Therefore, a separate backup system is necessary.

In this context, hydropower is stable energy if there is enough water in the reservoirs. In comparison, wind energy is unstable energy that can be stabilised to some extent with battery systems. Biogas will also be a supplement, and solar energy, which is also unstable energy, will be another supplement for the Faroe Islands, especially in the summer, when there may be problems with water and wind power at times. If tidal energy is developed for sustainable energy production, it will be a 100 % predictable energy source.

The Faroe Islands’ major challenge in the green transition lies in the fact that a safe replacement must be found as a backup for the oil, which is the electricity system’s safety net with the oil-fired power plants Vágsverkið on Suðuroy and Sundsverkið on Streymoy, which are in daily use. In the future, the hydropower in Vestmanna, together with a pumping system between two dams in the area, must be able to fulfil the task as a green daily backup system. The system will pump up the water for reuse in electricity production, and it will be powered by excess energy from wind power. There is still a limit to how much wind energy the Faroese electricity system can hold, and excess wind energy can therefore be converted into hydropower.

With the pumping system as part of hydropower, oil will be phased out as much as possible to only be a safety net in the event that there is not enough green energy available in the Faroese electricity system. When the Faroe Islands have reached that point, the oil-fired power plants can be compared to the cable connection that Denmark has to Germany and Sweden as well as the rest of the European electricity grid, where the countries act as each other’s safety net.

The Faroese electricity grid is divided into a main grid connecting the central part of the country and a separate system on Suðuroy. Moreover, there are smaller network systems on the small islands. Most of the Faroese electricity grid is buried in the ground as cable connections. This means that they are not affected by stormy weather as the traditional high voltage lines are. As a result, the failures in the high and medium voltage network have been significantly reduced.

District heating in the capital

The first public plans for district heating in Tórshavn were formulated in 1980, and in the late 1980s, SEV and Tórshavnar Kommuna entered into a collaboration on district heating. This collaboration is run by Fjarhitafelagið, which supplies heat to customers in the capital, mainly excess heat from the oil-fired power plant Sundsverkið and from Tórshavn’s incineration plant. Most customers are households, but a few hotels, the national stadium Tórsvøllur, the college Glasir and several large buildings are also connected to the district heating system. The number of consumers has increased from 814 in 2010 to 1,469 at the end of 2020, corresponding to an increase of 80.5 % in ten years.

The main goal of Fjarhitafelagið is to continue expanding the district heating system in Tórshavn. Plans have been made to include more green energy sources in the heating system to become completely independent of oil. In addition to excess heat, Fjarhitafelagið wants to extract heat from other sources, with the biogas plant FÖRKA being the first to be connected to the district heating system at the end of 2020. The goal is for FÖRKA to deliver 1.3 MWh to Fjarhitafelagið annually, equivalent to heat for 400 households.

Excess energy from wind farms in Tórshavn for heating large water tanks and an electric sea heat pump are part of the future plans for Fjarhitafelagið, which is jointly owned by SEV and Tórshavnar Kommuna.