Iceland’s stable renewable energy sources and secure and reliable electricity supply create competitive advantage and strong incentives for industries to locate in Iceland.
As Iceland is a member state of the European Economic Area (EEA), the energy business environment is based on the EU’s regulatory framework. This means that the arrangements applying to the single European market extends to Iceland.
Therefore EU and EEA firms can invest, for example, in industries and/or energy production in Iceland. Iceland is also participating in EU’s carbon trading scheme and has same kind of legal framework as the EU member states regarding electricity production and distribution.
Because of Iceland’s unharnessed renewable energy sources, it may be feasible to link Iceland and Europe with a green high voltage electricity cable. Recently, the world has been experiencing fast advancement in HVDC-transmission technologies, making this a real and an interesting possibility.