Energy and Renewable Power

From coal to clean energy

At the beginning of the 20th century, peat, dried sheep dung and imported coal were Icelanders' main fuels. The first hydropower plant was built in Hafnarfjörður in 1904, and the Elliðaár power plant started operating in Reykjavík in 1921. Reykjavík's district heating began piping hot water into homes in 1930. The oil crises of the 1970s greatly accelerated the spread of geothermal heating, and today about 90% of buildings are heated with geothermal water. This saves the nation enormous sums and greenhouse gas emissions every year.

Hydropower

Landsvirkjun, the National Power Company, was founded in 1965, and its first major plant, Búrfell on the Þjórsá river, came online in 1969, together with the Straumsvík aluminium smelter. Many plants have been built since, mainly on the Þjórsá and Tungnaá rivers.

Geothermal power

Geothermal power plants use steam and hot water from high-temperature areas to produce electricity and hot water for district heating. Hellisheiði is one of the largest geothermal power plants in the world. Svartsengi on Reykjanes was the first plant to produce both electricity and hot water for district heating, and its waste water formed the Blue Lagoon. Icelanders have shared their geothermal expertise with countries all over the world, including through the GRÓ Geothermal Training Programme, which has operated since 1979.

Controversial power plants

Not everyone is happy with power plants. The Kárahnjúkar plant in East Iceland was built despite fierce protests, as a large area of untouched wilderness was flooded by the Hálslón reservoir. The debate about power plants and nature conservation has been one of the most heated political disputes in Iceland in recent decades. To build consensus, a Master Plan was established in which power projects are classified into a utilisation category, an on-hold category and a protection category.

The energy transition and transport

Despite green electricity and heating, transport, fishing and aviation still run mostly on fossil fuels. The government aims for an energy transition and carbon neutrality by 2040. Electric cars have multiplied quickly, and for a time their share of new registrations was one of the highest in the world, second only to Norway. Work is under way on electrifying ports, producing e-fuels and hydrogen, and making greater use of wind power.

Wind power

Wind power has so far been little used in Iceland, despite the strong winds. Landsvirkjun's test turbines near Búrfell have shown high capacity factors, and Landsvirkjun's first wind farm, Búrfellslundur, is under construction. There is, however, debate about the visual impact of wind turbines on the landscape.