After receiving wildly disparate estimations on the profitability of building an undersea power cable to Scotland to tap foreign thirst for energy, Iceland has asked for a second study on the subject.
The country’s first feasibility study, according to Bloomberg (News - Alert), found a “considerable degree of uncertainty” as to how profitable it will be for the volcano-riddled island to export its power to a range of European markets. The study said that the building of the power cable could result in anywhere from $32 million to $62.5 million in annual export revenue.
“A divide that large can’t be used as the basis for a firm decision, although it makes for a good first step in information gathering,” Industry Minister Ragnheidur Elin Arnadottir told Bloomberg.
“A decision on the next step will be taken in the coming weeks, although I’m a little skeptical when it comes to putting down a timeframe,” she added.
The power cable would be the longest such ever built, stretching 727 miles undersea. But could very well be worth the trouble: as Iceland struggles to rise from the ashes of its 2008 economic meltdown, it’s looking for new revenue streams. It produced 17.2 terawatt-hours of electricity last year for its domestic needs. The U.K. month-ahead spot price values 17 terawatt-hours at $1.2 billion, according to Bloomberg Business numbers. Considering that the government has estimated that as much as three-quarters of the geothermic-rich island’s energy is untapped, energy could light up a big opportunity. And, it has deep hydropower resources as well from its glaciers, which contribute 73 percent of Iceland’s electricity production.
Of course, a doubling or tripling of power output would require exploiting some environmentally sensitive regions, according to the National Energy Authority.
“If Iceland wants to build a 700-megawatt or 1,100-megawatt cable to the U.K. or other European countries, we have to realize the potential environmental impact such a project may have,” said Arnadottir. “It’s not just a question of plugging the cable into the next available socket.”
Edited by Blaise McNamee