Iceland’s Rapid Shift to Renewable Energy

Iceland is known worldwide as a leader in sustainability and renewable energy. 100% of the country’s electricity is generated by renewable sources with 87% coming from hydropower and 13% from geothermal power. Additionally, nearly all of Iceland’s space and water heating is achieved through the use of geothermal energy. The country’s investment in renewable energy is what earned it a spot in the 2016 Global Green Economy Index’s top ten greenest economies in the world. Yet up until the 1970s, Iceland’s main source of energy came from imported fossil fuels.

So how did this tiny nation of only 350,000 turn their view on energy production around?

Iceland’s rapid shift to renewable energy was partially made possible by the island’s high level of geologic activity and unique location. The country is situated directly on the Mid-Atlantic Ridge which separates the North American and Eurasian tectonic plates, making Iceland home to various geysers, hot springs, and other hotspots of volcanic activity. These areas power Iceland’s geothermal energy systems. This geothermal power is used not only in electricity generation and space heating, but also in fish farming, swimming pool heating, and in keeping streets and parking spots snow-free. Contrastingly, 11% of the country is covered by glaciers. When temperatures get high enough, melting glaciers feed into rivers and dams which in turn supply the country with hydropower.

However, Iceland’s admirable energy revolution did not come about solely as a result of the country’s natural features. When oil price fluctuations in the 1950s and 60s posed a risk to Icelandic industries, the government began investing in research on domestic, sustainable energy sources. Today, Iceland’s government continues to show commitment to improving the nation’s green policies. One method it is using to do so is taxing. Starting in 2010, a carbon tax was imposed on all importers of fossil fuels. This carbon tax is also applied to fishing vessels and includes a CO2-based vehicle tax. These taxes hold industries responsible for environmentally harmful practices that contribute to climate change.

Despite its many advancements, Iceland still faces several environmental challenges. Its cheap energy production fuels energy-intensive industries such as aluminum smelting - a process in which aluminum is extracted from its oxide that requires significant amounts of electricity and produce high levels of greenhouse gas emissions. The country is also still heavily reliant on fossil fuels for transportation and fishing. Given this information, Iceland should not be viewed as an unattainable utopia regarding energy production, but instead as an example of what can be accomplished when municipalities, the public, and the government work together towards achieving energy sustainability.

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