In the UK, over many years we have developed a robust national grid which provides electricity for our homes, businesses and industries from a wide variety of sources, including renewable and non-renewable, to ensure that we can keep the lights on.
Blackouts and outages in the National Grid are thankfully extremely rare, but a key responsibility of Government is to do everything possible to maintain energy reliability.
This is why I was pleased that in October 2015 the Prime Minister agreed with his Icelandic counterpart, Davíð Gunnlaugsson, to explore further one of the UK’s most ambitious energy projects in decade; an interconnector between our two countries
IceLink, the proposed GB-Iceland interconnector, would be the longest subsea cable in the world, stretching nearly 1,200km and capable of carrying 1000 MW. Interconnectors are a direct link between two countries, and improve access to cheaper and, quite often, low-carbon sources of additional electricity, and indeed gas. This Government has encouraged more interconnection and, in addition to IceLink, we have a number of projects that are under way and under consideration, under our cap and floor regime, which does not leave the consumer completely at risk on the costs payable to the producer.
In a partnership between National Grid and Landsvirkjun, the state-owned generator in Iceland, the UK is in the position of having access to both home-grown geothermal energy and bringing in geothermal energy from another country; a completely carbon-free source of energy that would work for decades or longer.
Because of the way that the price determines the flow, prices in the UK will need to be higher for the power to flow this way. However, in aggregate, we anticipate that more interconnection would have a suppressing impact on wholesale prices in the UK, but not to such a great extent that that would unbalance the system in the UK.
You can read a recent statement from the UK – Iceland Energy Task Force here.
I am committed to ensuring that the UK is bold and ambitious in its aim for a renewable future, and this project demonstrates our willingness to think big.