“So far, it has been an excellent experience,” says Kristján Halldórsson of Landsvirkjun. Just a few months after implementing Powel Nimbus for all its generation and production planning, the Icelandic power company can already see benefits. Not only is its production more efficient and better planned than previously, added results have been more streamlined working processes and improved internal communication.
Producing 75% of Iceland’s total energy, the state-owned company operates 16 power stations.
World leading on green energy
There are two factors that make the energy sector in Iceland different from in other countries. Firstly, they are world leaders in green energy, with close to 100% of the country’s energy coming from renewable sources, the majority being hydropower. In Landsvirkjuns’s case, 14 of its power stations are hydropower and two geothermal.
Secondly, due to its location, Iceland is an isolated market, meaning that companies are unable to buy and sell electricity from abroad.
For a country where hydropower is the most common energy source, a dry spell will naturally have a great impact on producers. However, while dry periods in Norway, for instance, lead to more expensive energy, a dry period in Iceland can literally mean running out of power, especially when combined with bad planning.
Due to the nature of the Icelandic market, contracts between producers and customers state that energy companies can curtail energy due to low water inflow. This last happened on a large scale in 2014, which was a very dry year for Iceland.
Landsvirkjun’s hope is that the detailed optimisation provided by Nimbus will help it avoid curtailment as much as possible in the future.
Old vs new
Having used a homemade system implemented in Excel for close to a decade, the company was aware of its system’s limitations and knew that at some point they would have to invest in a more complex solution.
“Our previous system was made in conjunction with the Icelandic market being decentralised, and it was only made with the purpose of allocating generation,” says hydropower operation engineer Halldórsson. “What it lacked was the interaction between the water flow and the generation, and the optimisation of efficiency on an hourly basis.”
Although it is too early to see definite and conclusive results after just a few months, Halldórsson and his colleagues are confident that the Powel solution will help them plan better. The company estimates that around 20% of last year’s curtailment could have been avoided if Nimbus had already been implemented.
“Efficient use of water throughout the year will of course minimise the need for curtailment. If we use water efficiently and intelligently prior to a dry period, the need will be much less,” says Halldórsson.
Being isolated and completely self-sufficient when it comes to energy means that energy companies do not optimise in relation to price. Being outside any trading market, the important issue for them is planning in order to fulfil their contracts and delivering power according to commitments.
Curtailing naturally means a loss of business for its customers, and Landsvirkjun wants to avoid this as much as possible. The company is aiming to get as close to 100% delivery as possible, honouring its contracts and providing the customer with both value and good customer service.
“For our customers, curtailment means a direct loss, and what our customers can lose in sales is at least five times our losses,” says Halldórsson. “With the Powel solution we can increase the maximum sales out of the system accordingly, and better efficiency will directly contribute to more sales. Our conservative target is 0.5% improvement, at present time this means an additional 70 GWh capacity for maximum sale.”
Improved working processes
There are currently six people in the operation planning department using Nimbus, and the company is planning for around 20 additional people in various departments to have access to the system.
“Previously we had just one person sitting in front of the terminal making all the decisions, and having a one-user system really proved to be a constraint,” says Halldórsson. “Not just in terms of using the system, but also viewing the information.”
A benefit of Nimbus is that processes are clearly defined and the system tracks tasks, seeing what is being done and what needs doing. In addition, as well as generation scheduling, the system also manages work processes.
“I find it beneficial that all the users are ‘forced’ to do generation schedules in the same way. In the old system, it might matter slightly who was doing the generation scheduling. Now, with everybody having to follow exactly the same procedures, the working processes have become more consistent.”
With other departments being able to access the same system, they also hope for improved communication and information flow among departments.
From pilot to production
Powel first started working with Landsvirkjun at the end of 2013, when a pilot was set up. In the beginning of April 2015, CEO Hörður Arnarson officially declared Nimbus open by pressing the system’s Simulate button. Today, Powel Nimbus is used to plan Landsvirkjun’s entire hydropower production, ensuring optimal power production.
“For us, this was a very interesting project to work on,” says project manager at Powel, Bjørn Holmvik. “Not only did we get a chance to prove our solution’s adaptability to unusual circumstances, we also got to work with dedicated and very highly skilled Icelandic counterparts. We are now looking to continue our cooperation and see if there are ways we can develop the system further.”
Halldórsson and his colleagues agree. “So far, it has been an excellent experience. It has been educational for us regarding integrating generation with water management, and it has been a very good process working with Powel to customise and implement Powel Nimbus for the unique needs of the Icelandic system.”