Viability of a district heating system in Fjarðabyggð using waste heat from Alcoa Fjarðaál

This thesis describes a study of the viability of using excess energy from the exhaust gases at the Alcoa Fjarðaál aluminium plant to provide residential heating and hot water for household use in Reyðarfjörður. The results of the study indicate that such a system would be technically viable as well as delivering social and environmental benefits to Alcoa Fjarðaál, the residents of Reyðarfjörður and Iceland as a whole. The estimated costs for implementing a heat recovery system and distribution system are estimated to be 2 477 – 2 677 million ISK for an open loop system system or 2 528 – 2 678 million ISK for a closed loop system. The Icelandic government currently subsidizes electricity for residential heating where geothermal heating is not available. If the government were to provide seed capital amounting to 5 years’ worth of these subsidies, and the residents of Reyðarfjörður paid 80% of what they currently pay for heating, the break even point for both the open or closed loop system would be reached in 9-10 years. If the government-provided seed capital amounted to 11-12 years’ worth of subsidies, loans or capital investments would not be necessary. This thesis discusses several opportunities and a number of options as well as potential risks and challenges. In summary, this study indicates that there is an abundance of energy that is not being utilized under circumstances where it could be.Alcoa Foundatio