Iceland Launches an Energy Revolution; New Hydrogen Economy Begins April 24.

Business Editors and Energy Writers

REYKJAVIK, Iceland--(BUSINESS WIRE)--Feb. 6, 2003

The traditional "First Day of Summer" holiday in Iceland will hold special significance this year as the world's first commercial hydrogen filling station opens in the nation's capital of Reykjavik on April 24.

Iceland is the first country to pledge the future of its society to this newly feasible source of energy.

The first hydrogen station, Icelandic New Energy Ltd.'s ECTOS project, will be erected at an existing Shell retail station in Reykjavik, using Norsk Hydro electrolysis technology. Here, the hydrogen for the project will be produced by electrolyzing water, using electricity generated from renewable energy.

First to fill up will be a concept car from Mercedes. By late season, three hydrogen-powered city buses manufactured by DaimlerChrysler will also be fueled by compressed hydrogen. Initially the vehicles will be tested for two years in the streets of Reykjavik. Assuming a positive outcome, the goal is to replace a larger number of Reykjavik city buses with hydrogen vehicles. Eventually, hydrogen-powered private vehicles, marine vessels and fishing boats will be introduced.

The opening of the hydrogen filling station coincides with a conference in the capital city on Apr. 24-25 titled, "Making Hydrogen Available to the Public." (For registration information, see www.newenergy.is).

Icelandic New Energy (INE) Limited, a holding company of Icelandic business interests, is the principal in a partnership with DaimlerChrysler, Norsk Hydro (a energy company), and Royal Dutch Shell. This partnership constitutes the corporate and financial muscle needed to get Iceland's hydrogen economy off the ground. The driving force behind the idea is Prof. Bragi Arnason, head of chemistry at the University of Iceland's Science Institute, which is also a member of Icelandic New Energy.

Prof. Arnason has worked to create a non-polluting, hydrogen-fueled Iceland for more than 20 years. His hope, and that of the businesses backing him, is to have hydrogen fuel cells powering Iceland's cars and buses, as well as the nation's immense fishing fleet, in about 30 years.

Iceland is the perfect test site for hydrogen power on a national scale for several reasons. First, the country has a total population of about 281,000, with about two-thirds of the people living in or near Reykjavik. A smaller, more concentrated population means that fewer fueling stations have to be built, cutting costs for the country and INE Ltd. The second reason has to do with the nature of hydrogen power itself.

Hydrogen is the "greenest" of energy resources as long as the primary energy used to produce it is from sustainable sources. Hydrogen, the H in H20, is derived from splitting water molecules (using electrolyzing technology). When used in a fuel cell, hydrogen and oxygen again combine. The only thing that exits a hydrogen-powered car's tailpipe is water vapor. This water-to-water process means zero emissions from an infinitely renewable resource.

In the past, the major obstacle to creating hydrogen-based economies has been the technological complexity of fuel cells and its high cost. It has simply taken too much money and consumed too much fossil fuel-generated electricity to separate the water molecules. That is, until now. Two-thirds of Iceland's power already comes from eco-friendly geothermal and hydroelectric power sources. What's more, Iceland has experience in transferring from one energy source to another. Between 1940 and 1975, space heating was converted from oil to geothermal heating.

The entire process involves nothing more than harnessing the potential of water. If this experiment succeeds it will relieve the strain put on the world's non-renewable resources and pave the way for a powerful and clean source of energy for the future.

(For more information: www.newenergy.is)

Editor's note: To attend the opening of the filling station and the hydrogen conference on Apr. 24-25, contact the Icelandic Consulate General in New York, 212 593 2700 x 311; [e-mail].