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The Iceland effect | Powered by Renewable Energy

April 16th, 2019 | By Roger Kuznia


In a time when climate change is making headlines with dire predictions, countries throughout the world are looking for sustainable energy solutions. Against this background, Iceland stands out as a country with almost 100% of its electricity coming from renewable energy.

The story of Iceland’s transition from depending on fossil fuels to sustainable energy could be an inspiration for other countries to switch to more sustainable sources as well. However, Iceland has specific features that made its switch feasible. This leads to the question: Was Iceland’s switch a special case? Or can other countries also make such a switch?

Iceland’s special circumstances

Called the “land of fire and ice,” Iceland’s mixture of geology and its northerly location gives it extensive access to renewable energy resources. Located halfway between mainland Europe and North America, Iceland sits on the Mid-Atlantic Ridge between the Eurasian and North American tectonic plates. This very active volcanic zone powers the country’s geothermal systems. It also features glaciers that cover about 11% of the country. Seasonal melt from these glaciers contributes to Iceland’s hydropower system.

Due to these geographical features, Iceland’s energy needs – from single-family homes to industry – is powered for the most part by renewable sources. The only exception is the fossil fuels used for transportation.

Iceland’s switch from fossil fuel to green energy

Although Iceland is an excellent example of how renewable energy can benefit a modern economy, it wasn’t always that way. Until the 1970s, most of the country’s energy needs were met with imported fossil fuels. Why did this small country take on such a gargantuan mission in switching to renewable energy?

The switch did not come about from concern about the environment. The motivation factor behind the change was in fact, economics. Iceland could not bear the cost of oil price fluctuations caused by numerous market crises causing the energy market to fluctuate wildly. Iceland wanted a stable, reliable, and economically feasible energy source.

Local entrepreneurs led the charge

Local entrepreneurs took the first steps toward Iceland’s switch to geothermal and hydropower. Early in the 20th century, a farmer developed a way to use the hot water in the ground as a rudimentary geothermal heating system for his farm. City governments took note and began to systematically explore their geothermal resources and develop larger heating systems.

Hydropower projects began in much the same way. As farmers harnessed the power of water to generate electricity for their farms, small independent hydropower plants began to pop up around the country. The combination of these developments and the government’s eventual investment in them created the renewable economy of today’s Iceland.

Is Iceland a unique case?

Although Iceland’s switch to renewable energy is dramatic, is it replicable in other areas? Or do Iceland’s special geographical features make it an exceptional case that can’t be reproduced? Let’s take a closer look.

Iceland’s journey to sustainable energy is a valuable lesson for other countries. Just as hydro and geothermal power made sense for Iceland, local conditions in other countries will make sense for them. For example, in the U.S., a combination of wind and solar energy could supply most of the country’s energy needs.

The world may never be more ready to make a change than now. New and improved technology is increasingly available. Consumers and governments in the U.S. are becoming more aware of the advantages of solar power and wind power. These factors and the lessons learned from Iceland give countries a powerful tool for achieving a sustainable energy future.

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