Iceland could make money from undersea electricity cable to Europe

It would be profitable for Iceland to sell electricity to Europe through undersea cables; although more than one new power station would need to be dedicated to the project to make it worthwhile, a new report claims.

It has long been thought possible for Iceland to sell electricity under the sea to other European countries, but that such a project would cost more than it would earn. But a report on energy development which has recently been debated in Alþingi, says that another profitability study should be carried out. Such a study has, however, already been completed.

RÚV reports that Landsvirkjun, Iceland’s (public owned) largest generator, already commissioned a report which concludes that an undersea electricity cable project would be profitable. “In all likelihood it would be worthwhile today, or within a few years,” GAM Management economist Valdimar Ármann says.

The cable would traverse a thousand kilometres of difficult seabed terrain and would be the longest in the world. Nevertheless, Landsvikjun’s Magnús Bjarnason believes the proposed cable is the company’s biggest upcoming opportunity. More than one hydroelectric power station would likely be needed to provide enough electricity for the cable.

Landsvirkjun has several power stations in the pipeline. The first are Bjarnarflag and Búðarháls; and then Urriðafoss, Hvammur, Þeystareykir, Krafla, Búrfell, Hólmsá, Fannalækjarvirkjun, Gilsárvirkjun, Skrokkalda, Kolkuvirkjun, Holt and Hágöngur. Together their generating capacity is around seven terawatt hours.

Competition for electricity supplies could see higher bills to Icelandic households, the report warns – although government regulation could be used to counter that possibility.

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