Iceland stands as a global leader in producing clean electricity, achieving a remarkable milestone where virtually all, or 99.97%, of its electricity comes from low-carbon sources. The country efficiently harnesses its abundant natural resources, with hydropower contributing more than a third, at around 72%, and geothermal energy adding close to a third, approximately 27%, to its green portfolio. This achievement places Iceland in an enviable position in terms of sustainability. However, the country's next critical challenge lies in amplifying electricity generation to facilitate the electrification of transport, heating, and industrial sectors, which will demand significantly more electricity and contribute to reducing the global dependency on fossil fuels.
Data sources used on this page include IEA and World Bank. More about data sources →
Is Electricity Growing in Iceland?
Despite residing in this green energy haven, Iceland's electricity consumption per person has experienced a noticeable decline in recent years. The latest data for 2025 indicates an electricity consumption of 46,333 kWh per person, marking a substantial decrease from the previous high of 56,809 kWh in 2015. Similarly, clean electricity generation per person mirrors this decline, with current figures showing 46,321 kWh per person, down from the 2015 peak of 56,797 kWh. This downward trend is concerning, especially as the globe strives to boost clean energy production to meet escalating energy demands brought about by increases in population, electrification, and advancements like artificial intelligence.
Suggestions
To address this dip in electricity generation and anticipate growing future demand, Iceland should expand its low-carbon electricity capabilities by diversifying its energy sources. While the nation is already exemplary in its use of hydropower and geothermal energy, significant potential exists in integrating nuclear energy alongside increased solar energy initiatives. Nuclear energy, with its remarkable efficiency and minimal environmental impact, offers a robust, scalable solution to bolster clean electricity generation. Simultaneously, solar energy could supplement this by capturing clean energy during daylight hours. Harnessing these energies would not only ensure a sustainable electricity future for Iceland but also align with global imperatives to combat climate change and reduce reliance on fossil fuels.
History
Looking back at Iceland's history of low-carbon electricity development, key periods highlight the growth and expansion of clean energy. In the late 1970s and 1980s, small but steady increases marked advancements in hydroelectric production. The late 1990s ushered in a period of considerable growth with observable expansions in both hydro and geothermal, particularly noteworthy in 1999 with significant increases in both sectors. The early 2000s through 2008 saw substantial increases, particularly in geothermal energy, as Iceland tapped deeper into its volcanic resources. The last decade began with a setback in 2020 and 2024, experiencing declines in hydroelectric output. Nevertheless, such historical data emphasizes Iceland's persistent commitment to growing its clean energy capacity, serving as a foundation upon which future advancements in nuclear and solar energy could build.
