Electricity in Iceland in 2023

Iceland is a global leader in clean electricity, with a remarkable 99.97% of its electricity generated from low-carbon sources in 2023. Hydropower contributes just over 70% of this mix, while geothermal energy accounts for almost 30%. The reliance on clean energy puts Iceland at the forefront in combating climate change and minimizing air pollution. With close to no dependence on fossil fuels for electricity production, Iceland sets a strong example of sustainability. However, the next significant challenge for Iceland is to expand electrification in sectors such as transport, heating, and industry, which will demand substantially more electricity.

Suggestions

To meet the future increase in electricity demand, Iceland can further expand its low-carbon electricity generation by investing in additional hydropower and geothermal projects. Additionally, while the country is at hydropower capacity, it can look towards developing offshore wind farms and even consider small modular nuclear reactors to diversify and bolster its energy security. Exploring green hydrogen production using surplus low-carbon electricity could also be a strategic avenue, both for local use and export. The strategic combination of these clean energy technologies will enable Iceland to meet its higher electricity demands sustainably.

History

Low-carbon electricity generation in Iceland has a rich history of incremental growth. In the early years, specifically between 1973 and 1998, there were steady increases in hydropower capacity with modest additions of around 0.4 to 0.5 TWh. A significant milestone occurred in 1999 when geothermal energy made a noticeable debut with an increase of 0.5 TWh, alongside another hydropower boost. The first decade of the 2000s saw substantial progress, especially between 2006 and 2009, where geothermal and hydropower capacities each saw multiple additions, particularly marked by a massive 4 TWh surge in hydropower in 2008. Advancements continued into the 2010s and early 2020s with both clean energy forms frequently contributing to incremental but essential growths, solidifying Iceland's commitment to green energy.

Electricity Imports and Exports

Balance of Trade

Data Sources