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How Iceland became a global leader in green energy

In only a few decades, one island transformed itself from being completely reliant on imported fossil fuels to becoming a leader in green technology. Today, it is powered by 99.9 percent renewable energy.

Regarded as the ‘land of fire and ice’, Iceland has a natural landscape that experiences both extreme heat and freezing temperatures. The island is home to 330,000 people, as well as 200 active volcanoes and glaciers that span 11 percent of its total landmass.

Around the globe, there’s a running joke that Iceland should have been called Greenland, for it has far less ice cover than its closest and much larger neighbour of that name.

In recent decades, though, the argument for calling Iceland the ‘greenest’ land has become stronger for a different reason – as almost 100 percent of the energy it uses is derived from local natural resources.

But Iceland’s transition to clean energy didn’t start out of a primary concern for the climate. It came from looking around at what resources were available at home, in a (perhaps unwitting) resistance to rely on other nations for expensive fossil fuels.

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The ultimate DIY project

Iceland was motivated to switch to renewable energy during the 1970s, when its economy was still heavily dominated by fishing and sheep farming.

For centuries, the country was considered one of the poorest in Europe and was even listed as a developing country by the UNDP.

As oil prices increased rapidly due to economic instability and a resource crises that affected world energy markets, Iceland found itself unable to afford a dependency on imported fossil fuels, such as oil and coal.

It was then that the nation took its first steps to begin radically transforming its energy systems, by looking to its natural landscape for hydro and geothermal energy – a decision that would later position them as one of the most sustainable nations on the planet.

In Iceland, glacial ice melts during warmer months, giving life to rivers which empty out into the ocean. Installing turbines amidst this powerful water flow allows electricity to be generated and constantly recharged without reducing or eliminating natural elements in the process.

This hydropower accounts for 71 percent of Iceland’s usable energy, providing electricity across the entire country.

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The remainder of Iceland’s energy supply comes from geothermal sources. This is where steam power is generated as hot water and cold seawater meet at extreme temperatures nearly 2,000 metres below the Earth’s surface.

Harnessing geothermal energy has been paramount for the nation, as only 1 percent of its land is suitable for agriculture. In fact, powering greenhouses with geothermal energy first began as early as 1924, but upscaling this process has now allowed Iceland to farm over half of its own produce supply.

Heat from geothermal energy supplies has also been used to warm pavements, melting snow and ice off of streets, as well as to heat swimming pools, and to help boost populations in fish farming sectors.

Some may assume that Iceland’s biggest tourist attraction, The Blue Lagoon, is natural – but in fact, the spa-like water owes its warmth to this same process of capturing geothermal energy.

As a result of these green technologies, the country has become almost entirely self-sufficient, only relying on fossil fuels for independent vehicle transportation – which currently makes up 0.1 percent of its energy usage. All public buses in Iceland are powered by hydrogen.

This drastic switch to clean energy has opened up opportunities to focus on new sectors, such as high-tech industries, IT companies, tourism, creative culture and design, and improving the welfare of society.  The resulting economic boost led to universal healthcare and education being implemented for all.

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Towards a greener politics

Hydro and geothermal power has allowed Iceland to become not only self-sufficient in terms of energy sourcing, but has also improved local quality of life across the board. As a result, Iceland has been solidified as a leader in sustainability, strengthening its position as an advisor on matters of foreign policy and diplomacy.

In 2013, former President of Iceland, Ólafur Ragnar Grímsson, made a speech to the OECD Ambassadors in Paris saying: ‘Coming from a country with the largest glaciers in Europe, close to the frozen Arctic, Icelanders do not need to attend international conferences to be convinced of the accelerating rate of climate change.’

He continued, ’Our own neighbourhood exhibits ample evidence that time is running out, that without a comprehensive transformation of the energy systems the entire world will already in this century face costly and dramatic consequences of severe weather events and rising sea levels.’

Throughout his speech, former President Grímsson challenged other nations to look at adapting to new means of electricity production to combat climate change, but to also focus on the ‘multiple economic advantages and business opportunities [that arise] from a clean energy economy’.

Credit: ThinkGeoEnergy

That Iceland was able to pull itself out of a financial crisis, plighted by slow economic growth and low employment rates, by switching to green energy technologies is a lesson many countries can take notes from.

It’s also worth noting the strong domestic support for these changes, as in 2017, Katrin Jakobsdóttir became Iceland’s first Green Party prime minister and the only ruling Green PM in the world by winning her party a majority of seats in a snap election.

But many leaders have questioned if Iceland was an exceptional case for harnessing clean energy due to their proximity to natural resources, and if this is something that would be difficult to replicate elsewhere.

To any leader with doubts, Iceland’s prime minister outlined five key ways to make the switch to clean technologies and overcome potential barriers – based on the country’s own tactics.

1. Throughout early stages, establish cohesion between municipalities, governments, and the public – a dialogue of trust and a solution-based mindset is crucial for success.

2. Empower and engage with the public – utilise local talent and innovative entrepreneurs to help green energies take off and prove their immediate value by involving members of society.

3. Construct legal and regulatory frameworks and government incentives which support developments – local funding for specific projects will reduce risk in undertaking green projects.

4. Plan for the long term – renewable energy implementation will require stakeholders who are included in visualising and financially supporting necessary future developments of the project.

5. Showcase all successes – the public’s participation depends on understanding – increased, accessible knowledge about current green initiatives will lead to widespread acceptance and welcoming of more across the nation.


Credit: ThinkGeoEnergy

While moving to clean energy might look different for various countries – perhaps harnessing wind power would be more realistic for some – creating a feasible plan while gaining public support through the above methods will be critical.

As a result of switching to green technologies, Iceland’s residents boast low energy bills, a rich farming industry, a diversified fishery business, a growing tourism sector, a strong engineering and technical sector, and finally, a strong national position in the global economy and within political relations.

With Iceland’s success story to build upon, there’s no reason other nations should stick to the status quo, which has insofar catapulted us into the current climate crisis.

A clear strategy for implementation has been laid out, now all governments need to do is take the first step.