Under the plan, geothermal energy from a depth of 1,000-2,000 metres would drive turbines tied to electricity generators. It said that a power station would generate about five terawatt hours a year, or 4-5 percent of Norway's annual hydropower output.

If the plant were built, a submarine power cable about 1,200 kms (745.6 miles) long would have to be laid, either to Britain or Norway or to both. Transmission losses over the cable would be about six percent.

Statoil said preliminary assessments indicated that the project could compete with other types of renewable power but that geothermal power from Iceland was not competitive at current prices.