Energy in Iceland
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Through Iceland, Renewable resource and Renewable energy
The Icelandic government aspires that the nation will be carbon neutral by 2040. The largest obstacles to this are road transport and the fishing industry.
In 2025, Iceland's total electricity consumption was 20,243 GWh. Renewable energy provided almost 100% of production, with 70.5% coming from hydropower, 29.4% from geothermal power, and 0.1% from fossil fuels. Only two islands, Grímsey and Flatey, are not connected to the national grid and so rely primarily on diesel generators for electricity. Most of the hydropower plants are owned by Landsvirkjun (the National Power Company), which is the main supplier of electricity in Iceland. Landsvirkjun produces 12,469 GWh which is 75% of the total electricity production in Iceland.
The main use of geothermal energy is for space heating, with the heat being distributed to buildings through extensive district-heating systems. Nearly all Icelandic homes are heated with renewable energy, with 90% of homes being via geothermal energy. The remaining homes that are not located in areas with geothermal resources are heated by renewable electricity instead.
Iceland is the world's largest green energy producer per capita and largest electricity producer per capita, with approximately 55,000 kWh per person per year. In comparison, the EU average is less than 6,000 kWh. Most of this electricity is used in energy-intensive industrial sectors, such as aluminium production, which developed in Iceland thanks to the low cost of electricity.
Energy resources
Iceland's unique geology allows it to produce renewable energy relatively cheaply, from a variety of sources. Iceland is located on the Mid-Atlantic Ridge, which makes it one of the most tectonically active places in the world. There are over 200 volcanoes located in Iceland and over 600 hot springs. There are over 20 high-temperature steam fields that are at least 150 °C; many of them reach temperatures of 250 °C. This is what allows Iceland to harness geothermal energy, and these steam fields are used for heating everything from houses to swimming pools. Iceland is also starting to use "cold" areas away from the steam fields to produce warm water for space heating. There is a big potential for hydro power, as rivers, especial glacial ones, fall from the high areas and provide big changes in elevation over small distances, due to the mountainous landscape. Iceland has good resources for onshore wind. The two 0.9 MW turbines, Hafið, set up for testing purposes, produce 6.7 GWh/a, that gives 42% of the name plate power averaged over the year, a very high number for an onshore turbine. Offshore wind power is rather unlikely, due to few shallows along the coast.
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Experiments with hydrogen as a fuel
Imported oil fulfills most of Iceland's remaining energy needs, the cost of which has caused the country to focus on domestic renewable energy. Professor Bragi Árnason first proposed the idea of using hydrogen as a fuel source in Iceland during the 1970s when the oil crisis occurred. The idea was considered untenable, but in 1999 Icelandic New Energy was established to govern the transition of Iceland to the first hydrogen society by 2050.
In the early 2000s, the viability of hydrogen as a fuel source was considered, and whether Iceland's small population, small scale of the country's infrastructure, and access to natural energy would ease a transition from oil to hydrogen.
ECTOS Hydrogen demonstration project
The ECTOS (Ecological City Transport System) demonstration project ran from 2003 to August 2005. The project used three hydrogen fuel cell buses and one fuel station, with Strætó bs.
From January 2006 to January 2007 testing of hydrogen buses continued as part of the HyFLEET:CUTE project, which spanned 10 cities in Europe, China and Australia and was sponsored by the European Commission's 6th framework programme. The project studied the long-term effects and most-efficient ways of using hydrogen powered buses. The buses were run for longer periods of time and the durability of the fuel cell was compared to the internal combustion engine, which can theoretically last much longer. The project also compared the fuel efficiency of the original buses with that of new buses from a number of manufacturers.
The country's first hydrogen station opened in 2003 in Reykjavík. To avoid transportation difficulties, hydrogen is produced on-site with electrolysis (breaking down water into hydrogen and oxygen). The hydrogen station was closed in 2010, but was reopened in 2018. Two other hydrogen stations are in the country, one at Miklabraut near Kringlan and the other in Reykjanesbær.
Education and research
Several Icelandic institutions offer education in renewable energy at a university level and research programmes for its advancement:
- University of Iceland in Reykjavík, the country's largest research institution, has a programme in renewable energy.
- Keilir, Atlantic center of excellence in Ásbrú, runs a research center in energy sciences.
- Iceland School of Energy, a subsidiary of Reykjavik University, School of Science and Engineering in Reykjavik, offers M.Sc. studies in renewable energy engineering, policy and science.
- University of Akureyri
- United Nations University - Geothermal Training Programme
Several companies, public and private, are conducting extensive research in the field of renewable energy:
- The National Energy Authority of Iceland is charged with conducting energy research and providing consulting services related to energy development and utilisation.
- Landsvirkjun, the national electric company, conducts research in hydro-electric and geothermal power and funds a great deal of related research.
- The Icelandic Energy Portal is an independent information source on the Icelandic energy sector.
- Iceland Geosurvey (ÍSOR) is a public consulting and research institute providing specialist services to the Icelandic power industry, dedicated mainly to geothermal and hydroelectric research.