Connecting with another electricity market in Europe could provide Iceland with a unique opportunity to maximise the return from the country’s natural resources:
- Surplus energy already within the system and presently unutilised by industry could be sold.
- Further energy generation methods could be introduced.
- The flexibility of hydropower could be better utilized.
- Risk distribution could be increased.
- Iceland’s energy supply security could be increased by opening up the presently isolated system.
- A number of new and exciting employment opportunities could become a reality and the value created by such a project could be significant.
Earlier this summer an advisory group on a subsea HVDC electricity cable between Iceland and Europe handed over its recommendations to the Icelandic Minister of Industries and Innovation. The report shows that there are indications that such a HVDC cable between Iceland and the United Kingdom could prove macro-economically profitable if certain conditions were to be fulfilled; i.e. if negotiations with the counterparties should prove successful, procuring favourable energy prices and secure long term contracts.
The recommendations of the advisory group are a significant milestone in assessing the feasibility of connecting Iceland with the European electricity market. The advisory group was unanimous in its opinion that work should continue on mapping out the various aspects of the project domestically whilst concurrently seeking out answers on potential operational and ownership models from the counterparties in the UK.
The risk of domestic electricity prices multiplying, with a connection with European markets, seems to be minimal. The Norwegians have set a successful precedent for achieving the consensus of stakeholders whilst utilising the opportunity to sell electricity to the European market. This has been done without threatening the existence of industry within Norway.
The Minister of Industries and Innovation will assess the recommendations of the advisory group and come to a decision as to the next step. It is estimated that the preliminary findings will be released by the end of this year (2013). This will include a decision on if and when expensive and extensive detailed research on the project will begin.
The Vancouver-based Methanex has announced an initial USD 5 million investment in Icelandic Carbon Recycling International (CRI), a privately held company with headquarters in Reykjavik, Iceland. Methanex becomes one of the key shareholders of CRI, with Board representation.
In Iceland, CRI operates the world’s first renewable methanol plant, which utilizes CRI’s emissions-to- liquids (ETL) technology, utilizing renewable energy to convert carbon dioxide emissions to methanol. CRI markets this product in Europe as renewable methanol, under the registered brand name Vulcanol. The Vulcanol can be blended with gasoline and can also be used for production of biodiesel. Vulcanol is certified by the International Sustainability and Carbon Certification system (ISCC) as an ultra-low carbon advanced renewable transport fuel with no biogenic footprint.
According to press announcements, Methanex and CRI intend to collaborate on large scale projects based on CRI’s ETL technology by leveraging Methanex’s operational experience and global reach and CRI’s unique expertise in the production of ultra-low carbon renewable methanol. The companies say they are targeting to expand the use of methanol blended fuels in Europe.
Methanex is the world’s largest supplier of methanol to major international markets. It is a publicly traded company; Methanex shares are listed for trading on the Toronto Stock Exchange in Canada under the trading symbol “MX” and on the Nasdaq Global Market in the USA under the trading symbol “MEOH“.
Mr. John Floren, President and CEO of Methanex, says that the fastest growing markets for methanol are in the energy sector and that Methanex believes renewable methanol will play an important role in future applications. Mr. Floren has also pointed out that the team at CRI has demonstrated the ability to develop this technology, operate a production plant and successfully market renewable methanol, which further reinforces the value of this investment by Methanex.
The investment of Methanex in CRI shows that the Icelandic energy- and technology sectors are becoming increasingly interesting for foreign investors. Currently, several other foreign companies are considering investments in for example oil exploration on the Icelandic continental shelf and in silicon production in Northeast Iceland.