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Iceland's Sustainable Energy Story: A Model for the World?
About the author
Halla Hrund Logadóttir
Halla Hrund Logadóttir is Director of the Iceland School of Energy, Reykjavík University.
In an era when climate change is making it necessary for countries around the world to implement sustainable energy solutions, Iceland presents a unique situation. Today, almost 100 per cent of the electricity consumed in this small country of 330,000 people comes from renewable energy. In addition, 9 out of every 10 houses are heated directly with geothermal energy. The story of Iceland’s transition from fossil fuels may serve as an inspiration to other countries seeking to increase their share of renewable energy. Was Iceland’s transition a special case that is difficult to replicate, or can it be applied as a model for the rest of the world?
Iceland’s energy reality
Iceland is often called “the land of fire and ice”. It is this mixture of geology and northerly location that gives the country its extensive access to renewables. The island lies on the Mid-Atlantic Ridge between the North American and Eurasian tectonic plates, a very active volcanic zone that powers its geothermal systems. Glaciers cover 11 per cent of the country. Seasonal melt feeds glacial rivers, which run from mountains to the sea contributing to Iceland’s hydropower resources. Furthermore, the country has tremendous wind power potential, which remains virtually untapped.
Today, Iceland’s economy, ranging from the provision of heat and electricity for single-family homes to meeting the needs of energy intensive industries, is largely powered by green energy from hydro and geothermal sources. The only exception is a reliance on fossil fuels for transport.
The country’s geothermal energy provides society with numerous benefits other than electricity and district heating. It is widely used to melt snow off sidewalks, heat swimming pools, power fish farming, greenhouse cultivation and food processing, as well as for the production of cosmetics, such as merchandise from Iceland’s famous geothermal spa, the Blue Lagoon.
Iceland’s transition from coal and oil to renewables
While today Iceland is a strong example of how renewable energy can power a modern economy, this has not always been the case. For centuries, utilization of the geothermal resources was limited to washing and bathing, while hydropower production started out in the twentieth century with only a few Megawatts (MW) of power generation. In fact, until the early 1970s, the largest share of the country’s energy consumption was derived from imported fossil fuels. What made this small nation take on this big mission towards renewables?
Despite good intentions, it was not the importance of renewables for climate change that led to this development. The drive behind this transition was simple—Iceland could not sustain oil price fluctuations occurring due to a number of crises affecting world energy markets. It required a stable and economically feasible domestic energy resource for its isolated location on the edge of the Arctic Circle.
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