The latest assessments indicate that electricity sales via a sub-sea cable could prove to be profitable for Icelandic energy producers and competitive in price for electricity purchasers throughout Europe. However, the profitability of such a project would be dependent on bilateral agreements, addressing not only energy prices but the responsibility taken on by both parties. Landsvirkjun has been purposefully involved in expanding the Company’s knowledge on the profitability of the project, the potential societal effects and the underlying risk factors involved.

Many European nations are concerned with energy security matters and are willing to enter into long-term agreements to secure their electricity supply for the coming years. The British government already guarantees high prices for renewable electricity in the next 15 to 35 years. Electricity prices are substantially higher in many of Iceland’s neighbouring nations than the prices offered to Icelandic customers by Icelandic energy providers.

A sub-sea cable would give Icelanders the opportunity to better utilise the country’s energy resources and would increase the revenue created by these resources for the national economy.

The scale of the project would demand a broad consensus in Iceland for it to proceed. Further research is needed on the macro-economic and environmental effects of the project. The results of this research must also be openly discussed in Iceland.

The maritime area under assessment. The objective is to locate a favourable corridor routes for a sub-sea cable between possible landing points in Iceland and the UK.

The landing points for the cable must be determined before costly research on the route for the cable is initiated. The costs involved with choosing differing corridor routes must be assessed and compared and risk factors should be better identified. The environmental impact must be assessed and discussions should take place with stakeholders.

The total costs of six differing potential landing points in the UK were assessed and compared at the end of 2014. The total cost includes converter sites and the reinforcement of the transmission system in the UK. Similar assessments are being carried out for potential landing points in Iceland; from Landeyjasandur and eastward to Seyðisfjörður.

Highest quality standards

The sub-sea cable between Iceland and the UK would be at least 1000 km in length and would probably reach a depth of 1000 metres over a short distance. A direct current at a high voltage would be needed to transmit electricity via such a long sub-sea cable. The capacity of the cable is expected to be around 1000 MW, which is well within the range of proven technology.

The NorNed cable between Norway and Holland is the longest operational cable in the world. The NSN Link cable between Norway and the UK which will become operational in 2020 will be over 700 km in length.

If the sub-sea cable project were to go ahead then the cable would have to fulfil the highest quality standards. The cable would have to endure tension load when installed at a great depth, pressure at the ocean floor level and would need to be accessible (if the cable needed to be pulled up). Sub-sea cable technology in installing cables has advanced rapidly in the last few years in connection with oil and gas production on the ocean floor and in connection with offshore wind energy. New methods of sub-sea burial technology and protection have also been developed.

There are risks associated with production, transmission and the laying of the cable and one of the objectives of the project team is to minimise the risk of malfunction. In order to prevent damage to the cable, it would be buried under the ocean floor in areas where ships are likely to drop anchor or engage in fishing.

What opportunities does the subsea cable offer?

Landsvirkjun has collected public documents, reports and news on the sub-sea cable project. This information is available on Landsvirkjun’s website.