Iceland’s Problems with Energy Consumption

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Iceland’s Problems with Energy Consumption

Iceland has been the subject of some unfavorable attention over the past year, between its economic meltdown, its inability to pay its debt, and the recent volcanic eruption.

From an environmental standpoint, Iceland is a country of contradictions. Iceland is a small nation, with fewer than 350,000 people, which is smaller than most mid-sized North American cities.

For all of its small size, they have one of the highest per capita consumptions of energy on Earth, second only to Qatar. Yet most of that energy comes from renewable sources. Hydroelectric power accounts for over 74% of Iceland’s power generation, and geothermal account for another 25%. Fossil fuel sources are less than 1%. Iceland is looking at the real possibility of being fossil-fuel free in the near future

In the capital city of Rekjavik, streets and sidewalks are kept ice-free in winter by hot water from geothermal heating systems, and 80% of the city’s heating needs are met by geothermal as well.

Much of Iceland’s renewable power capacity has yet to be tapped. Current power production is approximately 9000 GWh/year, but potential production is estimated at over 50,000 GWh/year. Clearly, Iceland has the potential to be a major supplier of energy, and there is research ongoing into the possibility of exporting power to mainland Europe via submarine cable.

In the meantime, Iceland is using its abundant energy supplies to become a major producer of aluminum, which requires a great deal of electrical power to produce. By locating aluminum plants in Iceland, producers avoid using power that could be based on coal-fired plants. By using Iceland’s abundant power, the carbon footprint of aluminum production can be reduced by up to 90%.

iceland hydrogen bus

One of the biggest culprits in the production of greenhouse gases is transportation, in particular cars and trucks. By virtue of all that power, Iceland is making strides in this area as well. Excess power is being used to produce hydrogen for fuel, and already Iceland has the world’s largest fleet of hydrogen-powered vehicles outside of California. Speaking of fleets, the government of Iceland has an ambitious plan to modernize the country’s fishing fleet, and replace the boats with hydrogen fuel-cell-powered craft. Iceland aims to be the world’s first “Hydrogen Economy” by 2040. Already a hydrogen distribution network is being created, harnessing electricity and water to produce hydrogen right at the pumps.

Any delay in Iceland’s move to a hydrogen economy is not due to any failure in their infrastructure, but rather a failure in the ability of car manufacturers to produce fuel-cell powered vehicles. In the meantime, Iceland will move along with its small fleet of hydrogen-powered buses, and 40-some-off other fuel cell vehicles, and wait for the future to catch up with them.


Colin Dunn was born and raised in Northern Alberta. Growing up in the boreal forest gave him an appreciation for nature, an appreciation that was enhanced by the works of his artist mother, Svala Dunn, who captured the landscapes and wildlife of the north in her oils and watercolors.

He holds a Degree in Geography from the University of Alberta, with a concentration in Urban Studies. He has since found career in information technology, but still pursues his first interests in geography and the environment.

He lives and works in southern Vancouver Island, with his wife and three children.