How do you export electricity like Iceland? you don’t
YOU don’t export electricity. Or at least the country which is most successful at exporting electricity doesn’t in fact export electricity. Iceland has lots of luvverly cheap green ‘leccie. It’s also miles n’ miles from anywhere and trying to cable that stuff out would see most of it wasted before it could be used. So, Iceland exports electricity by not exporting electricity.
What they do instead is import stuff that needs electricity for the next stage of production, use their lovely green stuff to do that next stage, then export the result. For a couple of decades now it’s been aluminium. Turning alumina (the oxide of aluminium) into the metal itself costs around $900 in electricity per tonne of metal. When you plan these sorts of plants you work out where the energy is cheap first. Then you go build there. And that’s exactly what Iceland has been doing: import alumina, export aluminium.
Now in our more advanced digital world they’ve got another chance. For while electricity is a right bugger to ship around without losing it, data is a different story. As shown by this lovely internet we’re both using right now. So, stick the computers that run the internet, those clouds and server farms, in Iceland, send the data over the fibre optics and use that lovely green and cheap power.
It’s not the first time people have thought about not exporting the raw materials but instead a product. For centuries we’ve known that shipping large amounts of water about isn’t a very sensible idea. Just costs too much. And it takes 1,000 tonnes of water to grow one tonne of wheat. The sensible thing therefore is to grow the wheat where there is water and then ship that around the world: much cheaper.
Posted: 21st, August 2012 | In: Money Comment | TrackBack | Permalink
