Iceland stands as a remarkable leader in electricity generation, with almost all of its electricity, precisely 99.98%, derived from low-carbon sources. A major portion of this electricity, more than two-thirds, comes from hydropower, while geothermal energy makes up almost a third. This is a significant achievement for Iceland, ensuring that its electricity sector contributes minimally to climate change. The challenge ahead for Iceland is to extend this green ethos to other sectors like transportation, heating, and industry, which will significantly increase the demand for clean electricity. To maintain its low-carbon footprint, Iceland must enhance its electricity grid and generation capacity efficiently and sustainably.
Is Electricity Growing in Iceland?
Despite Iceland's strong foundation in low-carbon electricity, recent trends show a slight decline in overall electricity consumption. The current consumption sits at approximately 49,238 kWh per person, which marks an almost 7,561 kWh decrease from the 2015 record. Similarly, the low-carbon electricity generation per person has experienced a decline, now at 49,231 kWh compared to the previous record of 56,788 kWh per person in 2015. It is concerning that both overall and low-carbon electricity generation have decreased, suggesting stagnation rather than growth, at a time when increased clean electricity is essential to meet the demands of electrification and to combat the adverse effects of fossil fuels.
Suggestions
To address these challenges, Iceland should look into expanding its low-carbon electricity generation. While the country already skillfully harnesses hydro and geothermal energy, introducing nuclear and solar energy can further diversify and stabilize the electricity mix. Implementing advanced technologies like nuclear alongside solar pv panels could provide consistent, reliable power to support increased demand from electrifying the economy and advancing technological applications. Such a strategy would allow Iceland to remain a leader in green energy while also preparing for a sustainable future.
History
Tracing the history of low-carbon electricity in Iceland reveals a trend of growth punctuated by key developments across various decades. Notable expansions in hydroelectric capacity occurred in the 1970s and late 1990s, making significant contributions to the country's clean energy resources. The early 2000s saw substantial advancements in geothermal energy, with significant jumps in capacity, particularly in 2006 and 2007. The momentum continued into the 2010s, with both geothermal and hydro contributing to growth. However, in 2024, there's been an unusual decrease in both hydro and geothermal electricity generation. The setbacks in the current year's production underscore the importance of diversifying the low-carbon energy portfolio to guard against such declines. By investing in a broader range of low-carbon technologies, Iceland can sustain and enhance its green electricity generation in the coming years.
Electrification
We estimate the degree of electrification by comparing electricity and total energy emissions. More about methodology.