Regan Brown
Iceland is a world leader in renewable energy, with almost 100% of its electricity consumed coming from renewable sources. The country has no significant fossil fuel reserves and has been working to transition away from fossil fuels since the 1930s. Iceland's success in shifting from fossil fuels to renewable energy sources, such as geothermal and hydropower, is often attributed to the oil price crisis in the 1970s. However, the transition was also driven by the country's desire to increase energy independence and reduce its dependence on imported fossil fuels. While Iceland has made significant progress in renewable energy, it still faces challenges in transitioning its fishing fleet, cars, and buses away from fossil fuels. The country aims to become carbon neutral by 2040 and is exploring various initiatives to further develop and utilize renewable energy sources.
| Characteristics | Values |
|---|---|
| Electricity in Iceland's electricity grid produced from renewable resources | 100% |
| Total energy supply from domestically produced renewable energy sources | 85% |
| Share of geothermal energy in primary energy in 2016 | 65% |
| Share of hydropower in primary energy in 2016 | 20% |
| Share of fossil fuels in primary energy in 2016 | 15% |
| Iceland's government aspiration for carbon neutrality | 2040 |
| Islands in Iceland not connected to the national grid | Grímsey and Flatey |
| Iceland's energy intensive industry | Increased demand for electricity |
| Iceland's position in the world | First country to create an economy generated through industries fueled by renewable energy |
| Iceland's transition from fossil fuels | Started in the 1930s |
| Iceland's hydrogen stations | 3 |
| Iceland's fossil fuel reserves | None |
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What You'll Learn
Iceland's transition from fossil fuels to renewable energy
Iceland has made a remarkable transition from fossil fuels to renewable energy. The country has no significant fossil fuel reserves and imports 100% of its oil and coal. Until the early 1970s, the largest share of the country's energy consumption was derived from imported fossil fuels. However, Iceland could not sustain oil price fluctuations, which led to the development of a domestic energy resource.
The first phase of decarbonization occurred in Reykjavík, with the construction of the country's first urban geothermal utility during 1930–1944, eliminating coal. The second phase, from 1944 to 1970, saw many other townships attempt to follow Reykjavík's procedure and turn to domestic resources for heating, but most of these efforts were unsuccessful, and oil became the most common alternative to coal. The final elimination of oil in heating occurred during the 1970s, accelerated by the 1973–1974 oil price crisis. New geothermal utilities were built across Iceland, and the remaining areas switched to electric heating.
The established legal framework made it attractive for households to connect to the new geothermal district-heating network. Simultaneously, Iceland started to focus on large-scale hydropower development, which attracted large international industrial energy users. The country's abundant geothermal energy has also enabled renewable energy initiatives, such as Carbon Recycling International's carbon dioxide-to-methanol fuel process, helping to reduce Iceland's dependence on fossil fuels.
Iceland is now a world leader in renewable energy, with 100% of its electricity grid powered by renewable resources. Geothermal energy provided about 65% of primary energy in 2016, and hydropower provided 20%. The Icelandic government aspires to make the nation carbon neutral by 2040, with research underway on using geothermal electricity to split hydrogen from water, and then using hydrogen fuel cells to power vehicles and fishing trawlers.
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Iceland's fishing fleet, cars and buses still run on fossil fuels
Iceland has been a leader in renewable energy for over 50 years. The country's electricity grid is 100% powered by renewable resources, with 65% coming from geothermal energy, 20% from hydropower, and 15% from fossil fuels in 2016. Iceland's isolated location in the North Atlantic makes it expensive to import gasoline, so the country has focused on developing its abundant renewable energy resources.
Despite this, Iceland's fishing fleet, cars, and buses still run on fossil fuels. In 2015, the transport sector accounted for 15% of the country's total primary energy consumption. Iceland's fishing industry, in particular, is a significant user of fossil fuels, making the country one of the highest per capita greenhouse gas emitters in Europe.
Recognizing the need to transition away from fossil fuels, Iceland has been working towards becoming the world's first hydrogen-fueled economy. Hydrogen fuel cell technology is clean, with water vapor as the only byproduct. In 2003, Reykjavik opened a hydrogen fueling station to test three hydrogen fuel cell buses, and the country's first hydrogen cars were expected to go on sale in 2010. However, the transition to hydrogen fuel has faced challenges due to technological limitations and the high cost of storing hydrogen.
In addition to hydrogen, Iceland is also exploring other alternatives to fossil fuels. The country has a growing electric vehicle market, and some sectors are using biodiesel produced from grain farms. Iceland is also a world leader in geothermal energy, with extensive use of geothermal heating and plans to utilize geothermal electricity to produce hydrogen fuel cells.
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Iceland's lack of significant fossil fuel reserves
Iceland has no significant fossil fuel reserves and imports 100% of its oil and coal. The country meets about 85% of its primary energy needs from renewable sources, such as hydropower and geothermal power. Iceland's government has set a goal of becoming carbon neutral by 2040. To achieve this, they plan to develop wind and solar energy, as well as hydrogen and methane.
Iceland's transition to renewable energy began in the early 1970s due to oil price fluctuations caused by various crises affecting world energy markets. The country could not sustain these fluctuations, so it began to focus on domestic renewable energy sources. At the time, the largest share of the country's energy consumption was derived from imported fossil fuels.
In 2015, the total electricity consumption in Iceland was 18,798 GWh, with almost 100% of production coming from renewable energy sources. Geothermal energy provided about 65% of primary energy in 2016, while hydropower accounted for 20%. The share of fossil fuels, mainly oil products for the transport sector, was 15%.
Iceland has an abundance of geothermal energy, which has enabled various renewable energy initiatives. For example, Carbon Recycling International has developed a carbon dioxide-to-methanol fuel process that could help reduce Iceland's dependence on fossil fuels. Additionally, Iceland has been a leader in geothermal technical assistance and renewable energy education, with over 1,000 experts from around the world undertaking geothermal courses in the country since 1979.
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Iceland's use of geothermal energy to reduce fossil fuel dependence
Iceland has been a world leader in renewable energy, with 100% of its electricity grid being produced from renewable resources. The country's unique geological features, such as its active volcanos and geothermal activity, have made it particularly well-suited to harness geothermal energy.
Iceland's transition to renewable energy began in the early 1970s, when the country aimed to address energy price inequities and reduce its reliance on imported fossil fuels, which at the time made up the largest share of its energy consumption. The National Energy Authority's report in 1970 recommended increasing domestic production of geothermal power and hydroelectricity, and the subsequent international energy crisis in 1973 further catalysed this transition.
The use of geothermal energy in Iceland has a long history, with its initial uses including washing, bathing, and heating homes. However, the widespread adoption of geothermal energy as a significant energy source is a more recent development. The Iceland Deep Drilling Project, which drilled wells 15,000 feet below the island's surface, resulted in a 1700% increase in geothermal use over 25 years.
Today, geothermal energy produces over a quarter of Iceland's total electricity, and 90% of homes are heated by geothermal energy. The country's geothermal facilities have an installed capacity of 799 megawatts, contributing significantly to Iceland's goal of becoming carbon neutral by 2040.
In addition to its use of geothermal energy, Iceland has also focused on large-scale hydropower development, attracting international industrial energy users and diversifying its economy. The combination of these developments has transformed Iceland into a leader in clean energy, attracting investment from energy-intensive industries and inspiring other countries, particularly in Africa, to follow a similar path.
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Iceland's goal to be carbon neutral by 2040
Iceland is a world leader in renewable energy. The country's electricity grid is powered entirely by renewable resources, with 85% of its total primary energy supply derived from domestic sources. Geothermal energy and hydropower are the main sources of this renewable energy, providing about 65% and 20% of primary energy in 2016, respectively.
Despite this impressive progress, Iceland still uses fossil fuels, mainly oil products for the transport and fishing sectors, which made up the remaining 15% of the energy supply in 2016. Recognising the need to reduce their reliance on fossil fuels, the Icelandic government has set an ambitious goal: to achieve carbon neutrality before 2040. This target aligns with the country's commitments under the Paris Agreement, aiming to reduce greenhouse gas emissions by 40% by 2030.
Iceland's journey towards renewable energy began with the realisation that they could not sustain oil price fluctuations, which often occurred due to various crises affecting world energy markets. The transition was also influenced by the country's isolated location on the edge of the Arctic Circle, which required a stable and economically feasible domestic energy resource. Local entrepreneurs took the first steps towards renewable developments, with a farmer developing a primitive geothermal heating system for his farm using hot water seeping out of the ground.
Today, Iceland continues to innovate with renewable energy initiatives, such as Carbon Recycling International's carbon dioxide-to-methanol fuel process, which further reduces their dependence on fossil fuels. The country also explores alternative energy sources like solar power and hydrogen fuel, with the latter being the focus of the Icelandic New Energy initiative established in 1999.
To achieve its carbon neutrality target, the Icelandic government introduced a Climate Action Plan in 2018, outlining 150 actions to reduce emissions and increase carbon sequestration. The plan focuses on energy exchange in transport, particularly electrification in road transport, and carbon sequestration efforts through forestry and land reclamation. By sharing their knowledge and expertise in geothermal development, Iceland has become a model for other countries seeking a similar energy transition.
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Frequently asked questions
Yes, Iceland still uses fossil fuels, but the country has made significant strides towards eliminating its dependence on them. In 2016, 15% of Iceland's primary energy supply came from fossil fuels, mainly oil products for the transport sector.
Iceland began transitioning away from fossil fuels in the 1930s, with the first phase of decarbonisation taking place in Reykjavík, eliminating coal. The main driver behind this shift was the desire for energy independence and the need to reduce vulnerability to fluctuating oil prices.
Iceland has set ambitious goals for its energy future, aiming to be carbon neutral by 2040 and completely replace fossil fuels with renewables. The government has developed an Energy Policy to 2050, focusing on diversifying energy options, including wind, solar, hydrogen, and methane.
Iceland's fishing fleet, cars, and buses still rely on oil and petrol, making the country one of the highest per capita greenhouse gas emitters in Europe. Additionally, the country has limited solar power potential due to its high latitude and low insolation.
