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12. september 2014 Atvinnuvega- og nýsköpunarráðuneytið

Ávarp ráðherra við setningu fundar um arðsemi orkuútflutnings, 9. sept. 2014

ATH: Talað orð gildir

Ladies and Gentlemen,

It is with pleasure that I address you here today.

I am also pleased to see that the key-note speaker today is Mr. Ola Borten Moe, the former Minister of Energy and Petroleum in Norway. Our ministerial paths only crossed for a short period since he decided to leave politics, but I had the pleasure of meeting Mr. Moe over a year ago, during his summer vacation here in Iceland. I am looking forward to hear what he has to say here today.

Indeed we have always enjoyed very good cooperation with Norway when it comes to energy related matters. In this respect I can mention that just two weeks ago I had a meeting with the Norwegian Minister of Energy and Petroleum, Mr. Tord André Lien, and his staff, during my participation in the ONS („Offshore Northern Seas“) conference in Stavanger. At this meeting we mainly discussed matters related to oil and gas, but also the importance of continuing the very good cooperation and sharing of knowledge between the two countries in the field of energy in general.

The topic of today‘s meeting relates to potential benfits of export of electricity.

The idea of connecting Iceland to Europe with an interconnector has surfaced several times over the last decades and we can trace studies on such a project back to the seventies. Recent studies indicate that such a project may, based on certain assumptions, both be technically and economically viable.

On a Governmental level we have been examining the possibility of an interconnector for some time now and I am happy to share with you an update on where we stand today in that process.

A cross-political committee delivered a report on this issue a little more than a year ago. The conclusion of the report was that there were still several issues that we need to examine better, but that we should continue to look into the advantages and disadvantages of such a project. I presented this report to the Parliament last autumn, as I strongly believe that a project such as this one will never be entered into unless a thorough public and political discussion will be taken before. Following discussions in Parliament the report went to the Industry Committee of the Parliament, which concluded in it‘s findings that we should continue, under the auspices and leadership of the Government, to analyse certain aspects of this matter further before a decision can be made on whether to embark upon such a project or not.

And that is what we have done.

Since then I have met with my UK counterpart, the Secretary of State for Energy, Mr. Michael Fallon, where we discussed on general terms the possibility of an interconnector between the two countries. We know that there is interest from the UK towards such a project, but at the same time there is a clear understanding on their behalf that given the size of the project Iceland will need time to consider carefully all aspects of this before making any sort of commitement. We are also aware of that the UK Government has been considering the benefits of supporting renewable electricity projects located outside the UK and recently published a paper on Contract for Difference (CfD) for non-UK Renewable Electricity Projects.

In recent weeks we have been mapping out, within my Ministry what it is precisely that we need to look further into, based on the conclusions from the Parliament. We have divided this work into a number of projects and we have already inititated a few of them. We will proceed with other projects within the coming weeks and months.

To be more specific, these projects include the following:

  1. A cost-benefit analysis on the impact of an interconnector on industries, both small and large.
  2. Additional assessment on environmental factors, such as environmental cost.
  3. A study on availability of power and power need of industries in coming years.
  4. Analysis on the future development of energy markets in Europe and EU Energy policy.
  5. Further assessment on technical issues.
  6. Analysis on the experience of Norway with regard to interconnectors.

Some of these projects we will have to outsource, for instance an extensive cost-benefit analysis into the economic and environmental impact. The preparation of that is underway in accordance with general rules on public procurement. Other projects have already been initiated within my Ministry and within the National Energy Authority, such as a study on availability of power and power needs. On other projects we will work with the energy sector itself, such as on the further assessment of technical and practical issues.

Today we are, therfore, in the process of pressing ahead with these individual projects and continuing work on this matter, in line with the mandate and guidance that we have received from the Parliament.

The whole purpose of this exercise is to be able to make a responsible decision on the next step.

We should also bear in mind that in the field of energy the issue of an interconnector is indeed not the only project that is currently on our table. We are facing various immediate challenges which is a priority to address, such as the necessary improvement and build up of the electricity grid. New infrastructure investment is needed to maintain a secure and reliable delivery of electricity, which is a pre-condition in terms of economic and regional development, as well as for a project such as an interconnector. I can also mention the necessity to mitigate the cost of electricity distribution and house heating in rural areas. These are issues that have to be addressed without delay and in coming weeks I will submit bills of law before the Parliament in connection with them. I could mention a range of other important energy issues on my table, but will leave it at that.

On a final note, I have stated publicly before, that when it comes to the question of an interconnector or not, we should neither rush into such a project nor exclude it as a possibility. We should approach the issue responsibly with the interest of the Icelandic population at heart. The idea of an interconnector between Iceland and Europe is an exciting possibility which maybe is more realistic today than it has been before. It is important that we continue with the dialogue on this possibility; allow ourselves to be critical and identify the challenging and controversial parts of such a project.

We have to keep in mind that energy issues have for decades been of key importance in Iceland and we have been very fortunate over the years in building a sustainable and secure energy sector, which is one of the three main pillars of our economy (along with fisheries and tourism). Our point of departure in any discussion on fundamental changes within the energy sector should therefore be how we have managed to sucessfully build the sector over the last 50 years or more and how this sector has benefitted our economy and society. Simply put; we have a responsibility to be cautious, critical and careful in our decision making, while of course look into the future for new opportunities.

I would like to thank Íslandsbanki for setting up this meeting and I look forward to hear what Mr. Ola Borten Moe has to say, and the discussions which we will have later on today.

Thank you !


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