UK Treasury lukewarm on plan for Iceland to pay debt in energy

[phantom power]

Iceland could pay the £3.48bn it owes the UK and Holland by providing the two countries with a steady stream of green electricity instead of cash, if an ambitious proposal by a small Dutch think-tank takes hold.

Gijs Graafland, the director of the Amsterdam-based Planck Foundation, contacted Iceland's Prime Minister Johanna Sigurdardottir and its President Olafur Grimsson early this month to suggest that Iceland use its abundant supply of geothermal energy to pay back the British and Dutch loans that bailed out Iceland's failed Icesave bank.

Mr Graafland's "Energy for Debt" plan calls for treating kilowatts as currency. Iceland and its 320,000 inhabitants get all of their electricity from carbon-free sources, including geothermal and hydroelectric.

Like other energy observers, Mr Graafland believes there is huge potential in the country's largely untapped sources of geothermal power – heat form the earth which can be used to drive turbines. Iceland straddles the fault line between the North American and Eurasian tectonics plates, giving it plenty of geological action. He said: "A massive energy transition investment wave can help prevent a collapse from peak oil, and this can also help save the financial system."

http://www.independent.co.uk/news/business/news/uk-treasury-lukewarm-on-plan-for-iceland-to-pay-debt-in-energy-1935130.html