Iceland is a global leader in generating almost all of its electricity from low-carbon sources, with a remarkable 99.98% of its electricity derived from these means over the last 12 months, spanning from July 2024 to June 2025. This impressive achievement predominantly includes hydropower, which accounts for more than two-thirds of the country's electricity at around 72%, while geothermal energy makes up nearly 28%. Such a high reliance on clean electricity places Iceland at the forefront of sustainability in electricity generation. However, the country faces future challenges, primarily the pressing need to electrify other sectors such as transport, heating, and industry, which will necessitate a significant increase in clean electricity production.
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Is Electricity Growing in Iceland?
Despite Iceland's commitment to clean energy, the current state of electricity consumption tells a different story in terms of growth. As of 2025, Iceland's per capita electricity consumption stands at approximately 46,963 kWh, reflecting a substantial decrease from the previous peak of 56,809 kWh per person recorded in 2015, marking a decline of nearly 9,845 kWh. This trend is mirrored in the low-carbon sector, with per capita generation decreasing by approximately 9,842 kWh since 2015. While such reductions in consumption and generation raise concerns, they also emphasize the importance of advancing initiatives that can bolster electricity output in the coming years to accommodate expected increases in demand.
Suggestions
To address the challenge of ramping up electricity generation, Iceland should consider diversifying its clean energy portfolio. Emphasizing the expansion of solar and nuclear energy presents an effective pathway, as these technologies offer reliable and scalable low-carbon solutions. By incorporating solar power, Iceland can harness the potential of its natural lighting conditions, while also exploring the safety and efficiency improvements of modern nuclear technology to ensure a sustainable and robust energy mix. Such strategic expansion would not only meet increased electricity demands but also reinforce Iceland's standing as a pioneer in clean energy.
History
Over the decades, Iceland has steadily increased its low-carbon electricity generation, primarily through hydropower and geothermal energy advancements. Notable periods of growth began in the late 1990s and extended through the early 2000s. In 1997 and 1998, hydropower production increased by about 0.4 TWh annually, and similar momentum continued in 1999 with equal contributions from both hydro and geothermal sources. The early 2000s marked significant expansions—particularly in 2007 and 2008—with remarkable gains in both hydropower and geothermal capacity, up by several TWh in total. However, recent years have seen some variations, including a 0.5 TWh decline in 2020, followed by modest recoveries. To maintain this progress and combat future declines, continued investments in diverse low-carbon technologies are crucial.
