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Iceland Mag

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Going Green; How Iceland’s geothermal surplus could shape the UK energy market

By Matt Eliason

  • Geothermal energy It is the wave of the future and Iceland has the ability to naturally produce an abundance of this "green" energy. Photo/Vilhelm Gunnarsson

The average Icelander‘s "cost of living" expenses are inconvenient to say the least. With rates for everyday items exceeding the comparable prices of historically exorbitant cities such as New York and London, the Icelandic economy relies on the importation of goods to support its domestic economy. Therefore, Icelanders, and the millions of tourists that have visited this secluded Nordic country over the past decade, are forced to pay premium prices on just about everything in order for Icelandic retail stores to make a profit. However, there is one expense that Iceland does produce more efficiently than just about everyone else in world and curiously enough, it comes in “volcanic form.”

Thanks to a plethora of geothermal energy found beneath the island’s crust, the typical Icelandic power bill dwarfs that of its North American and European counterparts. In fact, Iceland produces about five times more energy domestically than this “Viking nation” actually needs. Therefore, due to the tremendous energy surplus geographically gifted to this Nordic country located in the North Atlantic, a massive project has been in the works to help Icelanders share this natural resource with the rest of the world. Exporting its surplus of “green energy” would help Iceland harvest a new form of internal income aside from the fishing and tourism industries that currently make up a majority of the country's domestic economy.

Making It Happen

Plans have been put in place for a £4.3bn Transatlantic Sea Cable that will allow Iceland to share its abundance of energy with the United Kingdom, a landmass plagued by expensive heating bills and growing energy shortages. It seems like the puzzle pieces fit perfectly as Iceland would be able to ship out its surplus of geothermal energy to the power-starved Brits, and the UK would welcome a cheaper alternative to their current energy situation. Additionally, this form of “green energy” will help England ease off of the "less desirable" forms of nuclear energy that it currently uses. If they don’t use it, they lose it. Thus, Iceland needs to make this “power play” happen to cash in on their geothermal revenue stream.

Iceland needs to make this “power play” happen to cash in on their geothermal revenue stream.

So what’s the problem? Why isn’t this energy solution up and running now? It ends up that placing 1,500km (932 mi) of underground sea cable between two secluded landmasses is no walk in the park logistically, politically and economically. The proposed, and frequently discussed, project is called IceLink and is being undertaken by Landsvirkjun, the Icelandic state-owned power company, in conjunction with the British government. The two countries have already signed an intergovernmental “memorandum of understanding” on the project in 2012. However, the actual construction of the cable has been slowly making its way through the red tape of both the Icelandic and British governments. The financial implications for a tiny country like Iceland are immensely important in the wake of its economic collapse and such a large financial investment would require help from the UK or from investors abroad.

Protecting the Beauty

If the whole energy debate wasn’t complicated enough, there is also an environmental component to Iceland’s natural energy production. Creating more hydropower could come at the expense of a number of Iceland’s beautiful landmarks, having an adverse effect on the tourist industry and more importantly, the innocence of Iceland’s pristine wilderness. Many Icelanders don’t want the land to be touched, and an ongoing public debate has resulted with many of Iceland’s prominent figures, such as world-famous musician Björk, campaigning against the new energy production.

Iceland has been presented with a natural resource coveted by its international neighbors, however, determining the correct method of energy exportation without compromising its environmental integrity, proves to be a daunting and controversial task. As an American, without a dog in the fight, I thought it would be interesting to take an unbiased look at the circumstances surrounding the transcontinental sea cable, and what it would mean for the future of Icelandic energy production as well as the envirnomental implications for Iceland's immaculate landscape.

Going Green

Chapter 1: Figuring out the Logistics

Chapter 2: The Financial and Environmental Balancing Act

Chapter 3: Proceeding with Cautious Optimism 

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