Iceland is a leader in renewable energy

Iceland has an abundance of clean, renewable energy thanks to its remarkable geography and geology that provides both hydro- and geothermal resources. In the 20th century, Icelanders harnessed these natural resources, an important factor in helping transform the population from a poor, coal reliant society to one currently enjoying very high living standards. With 85% of its primary energy needs being met with indigenous renewable resources, Iceland is at the forefront of sustainable energy production.

Almost all electricity in Iceland is produced using renewable energy sources, with 73% of electricity provided by hydropower plants and 26.8% from geothermal energy, accounting for over 99% of total electricity consumption in Iceland.

Icelanders are pioneers in the use of geothermal energy for space heating, with 90% of Icelandic households heated with geothermal water. Clean and affordable hot water is brought directly from boreholes to houses via pipelines. The remaining buildings are heated with electricity from renewable sources.

90% of Icelandic households are heated with geothermal water

At visitor centres located at power stations in the countryside, you can learn about the process of converting either hydro- or geothermal energy into electricity and how geothermal water is used for space heating. This can be a fun and interesting activity for the whole family. The exhibitions are often interactive and show how modern technology is used in the energy sector.  

Abundant renewable power and a favourable business environment have brought investors to Iceland who wish to limit the carbon footprint of energy intensive facilities such as aluminium smelters and data centres.

Imported fossil fuels are still used in transport in Iceland, as ships, planes and cars tend to run on conventional energy. Electric vehicle ownership is however growing quickly and recently there have been large investments in charging infrastructure for electric cars, with charging stations now available all around the ring-road. This is in line with the government’s policy of reducing the country’s reliance on imported fossil fuels. The fishing ship sector has also made significant progress with 43% less pollution in 2014 than 1990. This is largely thanks to more efficient ships, the quota system and the electrification of fishmeal production.



Iceland was formed around 25 million years ago, which makes it one of the youngest landmasses on the planet. Learn more about Icelandic geography and geology here.


Volcanic activity is a fact of life in Iceland, where people have learned to live with both its drawbacks, and considerable advantages, such as geothermal energy and dramatic natural environment.