Bjarnarflag power station in Iceland. Photo by Landsvirkjun

How Iceland succeeded with renewable energy

While some countries rely mostly on fossil fuels to make their energy, Iceland relies on 100% renewable energy sources to make their electricity. Hydroelectricity accounts for 73% and the other 27% is geothermal energy. In addition 9 out of every 10 buildings in Iceland are heated with geothermal energy. The cost of geothermal energy for residential heating in Iceland is the lowest in the world. Looking at how Iceland has achieved it’s success is increasingly important in an era where climate change is becoming a more serious problem every day.

Learning points

The United Nations performed an analysis on Iceland’s success with the transition from fossil fuels to renewable energy sources. They analysis resulted in a few learning points for other countries that have access to the resources needed.

  • Cohesion between municipalities, government and the public
  • Local empowerment and public engagement
  • A favorable legal and regulatory framework
  • Long term planning for renewable energy implementation
  • Showcasing every step of success to the public


Excluding how local farmers used geothermal pools for washing and bathing, geothermal and hydroelectric resources in Iceland were not taken advantage of for centuries. It wasn’t until the year 1904 that the first hydroelectric power station was built. It was only 9 kW but it was enough to make Hafnarfjörður the first electrically lit town in Iceland. This power station got the ball rolling and in 1915 a lot of homemade mini-hydroelectric power stations made a total of 370 kW of energy. The hydroelectric power plants got bigger and bigger and in 1965 the first big hydroelectric power plant Búrfellsvirkjun was built. In the same year the power company Landsvirkjun was founded which is by far the largest electricity generator in Iceland and one of the ten largest producers of renewable energy in Europe. It is owned by the state of Iceland which means that manipulating resources for power creation is done by democratically elected representatives instead of corporate big shots.

Búrfellsvirkjun  hydroelectric power plant. Photo by  Richard Bartz

Simultaneous to this hydroelectric plant building process Icelanders started taking advantage of their geothermal resources. The first documented use of geothermal heating came in 1907 when a farmer ran a concrete pipe from a hot spring to his house to get steam for heating. In 1930 the first pipeline was constructed in Iceland’s capital Reykjavík to heat the local hospital, two schools and some nearby houses. The government of Iceland established a geothermal drilling fund that loaned money for research and test drilling in the late 1960’s. In 1969 the first geothermal power station using steam turbines was built in Iceland. Since then 5 more geothermal power stations have been built.

Hrauneyjafoss power station. Photo by Landsvirkjun

The Blue Lagoon

An interesting side product of the geothermal adaptation came in 1976. A Geothermal power station was built in Svartsengi in Iceland’s southern peninsula. The power station was the first geothermal power station in the world that was both used for electric power generation and hot water production for district heating.  The waste water of the plant was supposed to form a stream and run down into the Atlantic. Instead the Sulfur in the water filled up the holes in the nearby lava fields. The hot waste water made what is now known as the Blue Lagoon. A local resident got permission to bathe in the lagoon as a treatment for his psoriasis which paved the way for more people to use the lagoon. Now the Blue Lagoon has become one of the top tourist attractions in Iceland. However most tourists are not aware of the fact that the Blue Lagoon was originally an environmental accident.

The Blue Lagoon. Photo by Landsvirkjun


Leave a Reply