Olafur Ragnar Grimsson - The Switch Interview

- I think the shortest way to explain Iceland it is the place on Earth where you can still witness the process of creation and you can understand fundamentally how small the human beings are compared to the extraordinary forces that are inside the Earth. Part of what we have done is utilized those forces inside the Earth to create one of the most advanced clean energy system in the world. Because we all learn in school that there is a fireball inside the Earth, but then we forget about it. But, here in Iceland we have explored that fireball and made it a basis of a huge economic and energy development over the past 50 years. So, I have seen this country develop from being almost exclusively dependent on fossil fuel over becoming 100% with respect to our electricity from clean energy resources and almost 100% in terms of space heating coming from clean energy resources. And, making Iceland a magnet for foreign investment, aluminum companies, data storage centers, and other companies simply because of the clean energy. So, if you need a case study or a demonstration of how an entire national economy can be transported in the lifetime of one generation from oil and coal over to clean energy, Iceland is your example. - Give us a brief history of geothermal development in Iceland. - When my mother was young and was being brought up, the only use for geothermal here in Iceland was to wash clothes. And, if you had told those people of my mother's generation that during my lifetime we would use the same resource to heat the houses in the country, to produce electricity for aluminum smelters, to create globally-known spas, and grow tomatoes and roses and cucumbers, they would have thought we were explaining a dream world. But then, especially in the second half of the 20th century, with the drilling techniques that came partly from the oil industry and with more advanced geological knowledge, we were gradually able to harness this resource. - [Derek] What have been some of the challenges? - The biggest question that remains is how do we harness the hot temperature areas as we drill further down into the Earth? The second challenge which we have not been particularly good at as you will see in the geothermal power plant in Iceland, is to build them more successfully into the landscape, to hide the pipes and so on and so forth which is easy to do but you just have to think it important in order to do it. If you compare geothermal with hydropower, the scale is completely different with respect to being environmentally friendly because hydropower requires huge dams that can have an enormous impact on the landscape whereas as with geothermal, you basically drill a hole. And, when you stop operating the plant in 70 years or 80 years' time, you just close the hole again and move the whole thing. - So, what would cause you to ever move one of these facilities? - You might have to move to another area because one of the things we have learned and the Californians didn't know 50 years ago so, is that you have to manage the boreholes. Some of them dry up. Some of them you can over-utilize. You have to give some of them a time to recover until you start using them again. So, you have to have a system where you move from one hole to another. One of the most fundamental challenges is how do we create an integrated comprehensive clean energy systems? We still have too much of a division that some companies specialize in sun power, others specialize in wind power, the third specialize in geothermal. And nowhere in the world have we got an integrated, multidimensional clean energy system. And, if we are going to be successful in the energy revolution that must take place if we are going to prevent irreversible climate change not to say for our own economic benefit, we need quickly to turn down these walls of division and separation between the different clean energy systems. One of the big advantages we have discovered here in Iceland about geothermal is how extremely beneficial in economic terms it is and how cheap the cost of heating the houses and running the companies, the electricity and so on, has become. Of course, the initial investment cost is high, but then you have to realize that the system will more or less run itself with very little maintenance for half a century or even more. And, in terms of what the Icelandic households and the consumer pays, it is ridiculously low if you compared it with other countries. For example, giving the price of electricity for a household here in Iceland, if you have an electric car, the total cost of running that car for a whole year, giving the electricity prices, is equal to two fillings of gasoline in the US. - What limits Iceland from going fully clean and renewable in the next five years? - Well, the main problem is that the car companies are not supplying us with sufficient number of electric cars. - [Derek] Okay. - If they were on the market in sufficient number, we could, in the next four or five years, cut Iceland down to perhaps only five to seven percent dependence on oil and coal. - So, what are some of the business opportunities that have come out of the geothermal resource here in Iceland? - The most fascinating aspect is the data storage in Iceland. Because many of the information technology companies want to base their operation on clean energy. The combination between the information society and the clean energy economy is an appealing market combination for many companies. You can basically use Iceland as a location for storing data, all kinds of data, American telephone calls, healthcare records, data from oil companies, whatever kind of data you need to store for a long time. And, what most of us don't realize is that the enormous data that we are creating every day and the access we want to have to that data requires enormous amount of energy. You can store it in Iceland. You have abundance of clean energy, you have the wind, so you don't have to spend a lot of money cooling the place down as you need to do in data centers. Here, we just open the window. And what is more, because we have a nationally-integrated power grid, we can locate these data storage centers in different parts of the country. When I talked to Bill Gates about this over three years ago, most people thought I was crazy when I was opening up this possibility. Now, we are already building the first data storage center, in this country. - Is that right? - Yes. - Fantastic. - I say to my American friends, giving the enormous capacity of American companies and universities and research institutions and the brain power this army of experts that you have in the United States, if you focused in the same way on the clean energy sector as we here in Iceland have done on the geothermal and hydro, and Denmark has done in the wind, two small countries which basically started from zero, the result for the United States would be so enormous and so beneficial that I believe it would create a completely new era of importance and power and prosperity."