Island outlines plan to rebuild shattered economy with help of 727-mile transmission cable
The Icelandic government is examining the feasibility of transmitting up to 18 terawatt-hours (TWh) of geothermal and hydropower to the UK each year as part of its efforts to revitalise the island’s stricken economy.
Ambitious plans designed to establish Iceland as a major exporter of clean energy have been mooted for years, but now state-owned utility Landsvirkjun is looking to revive the project with the launch of a detailed feasibility study.
The company, which currently produces 75 per cent of Iceland’s electricity, is exploring plans for a 727-mile transmission cable that would connect the island to Scotland and could enable energy exports worth up to $1.2bn (£0.74bn), allowing Iceland to rival Norway in terms of energy revenue per-capita.
The $2.1bn project would result in the longest transmission cable in the world and as such is likely to face numerous technical challenges.
However, Industry Minister Katrin Juliusdottir told news agency Bloomberg this week that the project has the full backing of the government.
“We have to consider options that allow us to generate the greatest amount of revenue,” Juliusdottir told Bloomberg. “Connecting Iceland with Europe via cable gives us the chance to sell our excess power onto the spot market in Europe.”
Iceland produced just over 17TWh of electricity in 2010, the vast majority of which went to four large smelters, with 73 per cent coming from hydropower fuelled by glacial run-off and 27 per cent from geothermal sources.
However, the government estimates that 75 per cent of the island’s energy resources are underdeveloped and that output could double or triple over the next 30 years if more environmentally sensitive areas are exploited. It sold geothermal firm HS Orka hf to Canada’s Magma Energy last year with a brief to diversify to industries beyond smelters, such as data centres and chemical industries.
The cable could also feed into the EU’s proposed North Sea super-grid project, which aims to help back up increased wind energy capacity with more predictable renewable sources, such as hydro and geothermal.
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