Split over Iceland plan to relay Earth’s energy via Scotland

ICELAND’S drive to harness ­geothermal energy – taking the heat from molten rock below the Earth’s crust to power electricity generation – has not been without its ­problems.

When drilling began for one such plant at Krafla, the ground moved along a six-mile fissure, and red-hot lava began belching forth. The eruptions continued for nine years.

Following the construction of a stone and soil barrier to protect the power station from any future lava flows, today Krafla is a showcase of Iceland’s peerless mastery of geothermal, renewable energy.

However, another problem has risen to the surface in the volcanically active North Atlantic island nation of only 320,000 people – what to do with all the electricity it could generate from exploiting the geothermal potential below its landmass.

The state-owned power company, Landsvirkjun, which operates Krafla, sells just 17 per cent of its electricity to households and local industry. The rest goes mostly to aluminium smelters owned by US giant Alcoa and other foreign companies lured to Iceland by its abundant supply of cheap geothermal energy.

Now a huge and potentially far more lucrative market beckons – if only Iceland can find a way to transmit electricity across the more than 1,000 miles of icy sea that separate it from the 500 million consumers of the European Union.

“Prices are so low here that it is normal we should want to sell to Europe and get a better price,” said Stein Agust Steinsson, Krafla’s manager. “It is not good to put all our eggs in one basket.”

Laying an underwater cable in the North Atlantic would cost more than £1.3 billion, but the idea is not popular with those who worry about Iceland – whose people pride themselves in being self-reliant – becoming an ice-covered version of Middle East nations dependent on energy exports. Backers of the cable “are looking for easy money, but who is going to pay in the end?” asked Lára Hanna Einarsdóttir, a blogger who writes on the risks to Iceland from geothermal energy. “We will all pay.”

Iceland, Ms Einarsdóttir said, should use its energy sources to “supply ourselves and coming generations” and not gamble with its unique heritage by “building more and more plants so that we can provide electricity to towns in Scotland”.

The idea of exporting electricity to Europe has been around for decades and has been “technically doable for some time,” said Hörður Arnarson, the power company’s chief, “but it was not seen as economically feasible until recently.”

Whether Iceland pursues the cable project depends on a government review. “If there is not a broad consensus, we won’t do it,” Mr Arnarson said.

On paper, said Gudni Jóhannesson, director general of the National Energy Authority, Iceland has so much geothermal energy “there is no real limit” to how much can be generated, given advances in drilling technology. But over-exploiting those reserves, he added, would require cracking huge amounts of rock and vast investment. This, he said, means Iceland should avoid any unrealistic ambitions of becoming a geothermal Saudi Arabia and stay mindful of its limits: “If we export everything we now have we could perhaps supply Paris,” he pointed out.