Geothermal Energy in Iceland: Too Much of a Good Thing?
March 4, 2013
Iceland is named the land of fire and ice for a good reason. It is certainly icy: temperatures hover around 10-20°F (-12 to -6°C) in the winter. But underneath that frozen earth lies fiery hot rock and water — so much of it that 87 percent of the country’s heat and hot water demand is met with geothermal energy and 25 percent of its electricity demand is supplied by geothermal power. Hydropower supplies the other 75 percent of electricity demand, which means that the country is powered 100 percent with renewables. What an accomplishment.
Icelanders pride themselves on that sustainability — that ability to survive, all on its own, far removed from Europe and the U.S. A recent film, Future of Hope, highlights the country’s sustainability goals, which include growing its own food and preserving its striking natural beauty, among other endeavors.
But the country is weighing a difficult choice right now as it considers what to do with that abundant geothermal energy it is so lucky to have. In 2010, there was a countrywide backlash when Canadian company Magma Energy (now Alterra) swooped in and purchased 98 percent of Icelandic geothermal energy company HS Orka. Icelanders were uncomfortable with an outsider owning one of its companies. Alterra sold back 25 percent of HS Orka to a consortium of 14 Icelandic pension funds in May 2011.
The latest debate surrounds a proposed billion dollar HVDC underwater electricity interconnector that, if built, would export clean geothermal electricity to the U.K. to help meet its renewable energy goals. The plan is incredibly (and admittedly) ambitious; the two countries signed an MOU last summer to explore the possibility.
Icelanders are not entirely convinced that exporting the country’s rich geothermal resource is a good idea. High-profile Icelandic blogger Lára Hanna Einarsdóttir says that everyone in Iceland “will pay” if the electricity is exported. Instead she wants to keep the resource within the country’s borders for future generations. On the flip side is, of course, money. Geothermal power is cheap in Iceland and the country could get a nice price for it, if it could sell the power to nations that need clean energy to meet their goals. Keep in mind that Iceland is a country still recovering from a massive financial crisis that hit in 2008.
I’ll be looking into these topics and more this week. Invest in Iceland has paid for me to visit its stunning country and that’s where I am right now. The wind is howling outside of my hotel window – evidence of that iciness – as I write this. This week, I will visit a data center and two geothermal power plants along with journalists from Europe and the U.S. I’ll end the visit with a stop by the Iceland Geothermal Conference on March 7.
Let me know what you’d like to learn about Iceland’s vast renewable energy resources by leaving a comment below. I’ll be talking to a lot of experts here and I’ll try to ask your questions.
As they say in Iceland: Hafa góðan dag!
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