Iceland is a quite large country (100,000 km ²) rich of energy resources but with a small population (400,000). The electricity production is 20 TWh (14 hydro, 6 geothermal). Wind energy has not been utilized so far, but conditions in Iceland for wind energy are good (capacity factor 0.4). It is possible to produce lot of electricity in Iceland by wind. If we assume it is possible to produce 2MW per km ² of land area, 20 TWh can be produced by utilizing only 1% of Iceland. By utilizing 5% of Iceland, 100 TWh can be produced (average power 11,400 MW).

Wind energy is unreliable, varies from time to time, therefore mainly two options for utilizing wind produced electricity in Iceland have been mentioned :

Sell ​​it abroad by HVDC submarine cable

Use it to produce electrofuels

Many HVDC submarine cables have been installed in Europe in recent years, the longest being the Viking Link, 765 km. But still no HVDC submarine cables have been laid between Iceland and Europe. One reason is probably the distance, but cable between Iceland and Scotland would be more than 1,000 km. But to carry 100 TWh to Europe, one cable is not enough. For that more than 15 cables are needed (each 700 MW).

But will 100 TWh of electricity to Europe change anything? Electricity consumption in Great Britain is ca. 4.2 MWh per capita per year and 5.5 MWh in Germany. 100 TWh is electricity consumption of 20 million people society (if 5MWh per capita). So wind energy utilization in Iceland does matter for Europe.

The North Atlantic is different weather area than Europe. Often completely different wind in Iceland than in Europe. More variability in wind between areas improves the whole system.

Connection from Iceland to Europe also opens possibilities to use the wind energy on east cost of Greenland.

Carrying electricity from Iceland to Europe is costly. Too costly? The electricity will always be cheaper at the Icelandic end than the Europe end of the cables. Utilization of the wind in Iceland and cables to Europe - which give more reliability - could lead to more energy intensive industry in Iceland.

If the wind would be utilized in Iceland, where should the windmills be located? In agricultural areas? Or in the uninhabited mid-highland? Or in uninhabited lowland regions? Large scale use of wind energy in Iceland gives opportunity for huge positive economical effects on Iceland’s rural areas. Depends on political will.