The Prime Minister of the UK, Mr David Cameron, made an official visit to Iceland in the October of 2015. The Prime Minister met with Iceland’s Prime Minister, Mr Sigmundur Davíð Gunnlaugsson, to discuss the possibility of constructing a sub-sea cable between Iceland and the UK.
The collaboration between Landsvirkjun, Landsnet and the National Grid in the UK on the possible sub-sea link continued this year.
The construction of a sub-sea cable would open up opportunities to utilise flexible energy, which is otherwise difficult to utilise within the isolated Icelandic electricity system. The UK has real-time fluctuating electricity prices which are higher during peak demand periods.
Landsvirkjun is working in cooperation with domestic and foreign professionals to assess the technical and economic feasibility of a sub-sea cable between Iceland and the UK. At present the project is in its early stages and all project components are being analysed in a thorough and professional manner.
More efficient use of natural resources
A sub-sea cable would offer the possibility of increasing generation and sales when demand is high and prices are high. Electricity generation costs in Iceland could also be reduced by purchasing electricity from the UK when prices are low. The sub-sea cable would therefore improve the utilisation of natural resources in Iceland, increase energy security and reduce operational risks for energy generation companies.
Extensive research has been carried out on the feasibility of a sub-sea cable. The research report produced in 2013 by the Institute of Economic Studies at the University of Iceland outlines the fact that a sub-sea cable would facilitate the direct export of electricity and would also result in financial benefits to Icelandic society.
There are indications that electricity sales from the sub-sea cable would prove to be competitive at the international level. This comes as a result of the changing landscape of energy markets as well as the technological advances in sub-sea cable construction. These types of cables are capable of transporting more power over greater distances and depths, in often difficult ocean terrain.