The idea of constructing a submarine cable between Iceland and the UK is nothing new. Icelanders claim that the idea has been discussed for over 60 years. The most dated article I could find was done 25 years ago in an Economist piece that mentioned the benefits of utilizing Iceland’s natural resources to decrease future dependence on nuclear power. The story states that, “Improvements in cable technology mean that an undersea link between Iceland and Britain is feasible, although constructing each of the four or five cables needed could take five years.”
The fact that the construction of a submarine cable was being talked about over 25 years ago illustrates the lethargic pace with which this project has been pushed forward. Much like a procrastinating college student, the two countries have failed to execute on their vision for the sea cable, and must now pull a metaphorical “all-nighter” in order to complete IceLink, amid English energy shortages and Icelandic economic cycles. In fact, the UK electricity forecast is such a daunting concern the state-run regulator of the electricity and gas markets in Great Britain, Ofgem, predicts the Energy shortage will result in blackouts during 2015.
A History of Repetition
In researching the history of this project, I began to feel like Bill Murray in Groundhogs Day. It seemed as if the same report was appearing over and over for the last three years with minimal progress being made. A report done in 2011 by IceNews was entitled, “Renewable energy via sub-sea cable to Europe examined by Landsvirkjun.” Then in 2012, a report done by BBC News was entitled, “UK in talks with Iceland over ‘Volcanic powerlink.’” A 2013 article from Reuters reads, “Iceland eyes long subsea cable, may become green battery for UK.” And finally in May of this year Bloomberg published an article titled, “Iceland Moves Closer to Powering European homes with Green Power.” In almost four years of Submarine cable talks, the headlines have progressed from “examined” to “moves closer.”
In an official statement on Landsvirkjun’s website, the power company states its reasoning behind the projects sluggish progress before 2009 was, “The feasibility of such a project has been regularly assessed over the last 30 years. The result of this research showed that such a project would be technically possible but would not be a profitable endeavor.” Yet the company continues to state, “New research conducted by Landsvirkjun, in collaboration with Landsnet, between 2009 and 2010 shed new light on the potential of such a project; that it could in fact be economically viable. The main rationale behind this shift was higher electricity prices in Europe and an increased demand for renewable energy sources, with no or low emission of greenhouse gases.”
Finding the right ingredients
That was five years ago, so why are the “talks” moving so slow? I believe the Icelandic government needs to find the right combination of financing mixed with the urgency to actually push this project ot he next level. Iceland does not currently have the infrastructure needed to partake in such a massive international business venture. That’s not to say they couldn’t produce the necessary workforce and facilities needed to make this a reality, but the financing will need some assistance.
The Icelandic government needs to put a firm stance on whether they are content with the current geothermal energy production or if they want to ramp up hydropower capabilities. This would come at the expense of some of Iceland’s most scenic tourist destinations, but could yield a significant amount of additional energy. The bottom line is that Icelanders, who are notoriously known for moving at their own pace, must crank up their efforts regarding the sea cable's construction if they want to take advantage of this incredible natural resource. Currently, its anybody's best guess on when the project could realistically be finished. The completion date has moved from 2020, as stated by Landsvirkjun, to 2022 as stated by Bloomberg and in all honesty, no analyst would have the necessary data to accurately predict a completion date, because plans to start construction have not been finalized.
For reference, there are already international sea cables connecting European countries. The Norwegian and British power grids are linked to Holland with additional plans to link the Netherlands to Germany and Denmark. Britain and France have also been joined together by similar submarine cables. However, none of the countries mentioned above have the potential to match Iceland’s geothermal production and none of the cables would span the distance of Icelink. With such as small population to power, Icelandic households only use about 5% of the total power produced domestically. Therefore, despite the financial risks of actually building the submarine cable, which has been done seamlessly before between the countries mentioned above, the IceLink project would ultimately benefit Iceland economically.
Going Green
Chapter 2: The Financial and Environmental Balancing Act
Chapter 3: Proceeding with Cautious Optimism
Going Green; How Iceland’s geothermal surplus could shape the UK energy market.
Chapter 1
The idea of constructing a submarine cable between Iceland and the UK is nothing new. Icelanders claim that the idea has been discussed for over 60 years. The most dated article I could find was done 25 years ago in an Economist piece that mentioned the benefits of utilizing Iceland’s natural resources to decrease future dependence on nuclear power. The story states that, “Improvements in cable technology mean that an undersea link between Iceland and Britain is feasible, although constructing each of the four or five cables needed could take five years.”
The fact that the construction of a submarine cable was being talked about over 25 years ago illustrates the lethargic pace with which this project has been pushed forward. Much like a procrastinating college student, the two countries have failed to execute on their vision for the sea cable, and must now pull a metaphorical “all-nighter” in order to complete IceLink, amid English energy shortages and Icelandic economic cycles. In fact, the UK electricity forecast is such a daunting concern the state-run regulator of the electricity and gas markets in Great Britain, Ofgem, predicts the Energy shortage will result in blackouts during 2015.
A History of Repetition
In researching the history of this project, I began to feel like Bill Murray in Groundhogs Day. It seemed as if the same report was appearing over and over for the last three years with minimal progress being made. A report done in 2011 by IceNews was entitled, “Renewable energy via sub-sea cable to Europe examined by Landsvirkjun.” Then in 2012, a report done by BBC News was entitled, “UK in talks with Iceland over ‘Volcanic powerlink.’” A 2013 article from Reuters reads, “Iceland eyes long subsea cable, may become green battery for UK.” And finally in May of this year Bloomberg published an article titled, “Iceland Moves Closer to Powering European homes with Green Power.” In almost four years of Submarine cable talks, the headlines have progressed from “examined” to “moves closer.”
In an official statement on Landsvirkjun’s website, the power company states its reasoning behind the projects sluggish progress before 2009 was, “The feasibility of such a project has been regularly assessed over the last 30 years. The result of this research showed that such a project would be technically possible but would not be a profitable endeavor.” Yet the company continues to state, “New research conducted by Landsvirkjun, in collaboration with Landsnet, between 2009 and 2010 shed new light on the potential of such a project; that it could in fact be economically viable. The main rationale behind this shift was higher electricity prices in Europe and an increased demand for renewable energy sources, with no or low emission of greenhouse gases.”
Finding the right ingredients
That was five years ago, so why are the “talks” moving so slow? I believe the Icelandic government needs to find the right combination of financing mixed with the urgency to actually push this project ot he next level. Iceland does not currently have the infrastructure needed to partake in such a massive international business venture. That’s not to say they couldn’t produce the necessary workforce and facilities needed to make this a reality, but the financing will need some assistance.
The Icelandic government needs to put a firm stance on whether they are content with the current geothermal energy production or if they want to ramp up hydropower capabilities. This would come at the expense of some of Iceland’s most scenic tourist destinations, but could yield a significant amount of additional energy. The bottom line is that Icelanders, who are notoriously known for moving at their own pace, must crank up their efforts regarding the sea cable's construction if they want to take advantage of this incredible natural resource. Currently, its anybody's best guess on when the project could realistically be finished. The completion date has moved from 2020, as stated by Landsvirkjun, to 2022 as stated by Bloomberg and in all honesty, no analyst would have the necessary data to accurately predict a completion date, because plans to start construction have not been finalized.
For reference, there are already international sea cables connecting European countries. The Norwegian and British power grids are linked to Holland with additional plans to link the Netherlands to Germany and Denmark. Britain and France have also been joined together by similar submarine cables. However, none of the countries mentioned above have the potential to match Iceland’s geothermal production and none of the cables would span the distance of Icelink. With such as small population to power, Icelandic households only use about 5% of the total power produced domestically. Therefore, despite the financial risks of actually building the submarine cable, which has been done seamlessly before between the countries mentioned above, the IceLink project would ultimately benefit Iceland economically.
Going Green
Chapter 2: The Financial and Environmental Balancing Act
Chapter 3: Proceeding with Cautious Optimism
