Iceland stands as a global leader in the deployment of low-carbon electricity, with a remarkable 99.97% of its electricity coming from clean sources over the past year, spanning from June 2025 to May 2026. Hydropower, a well-established technology in Iceland, accounts for more than two-thirds of the generation, while geothermal energy contributes almost a third. This dominance of low-carbon electricity in Iceland's energy mix underscores the country’s commitment to sustainable development and reducing its reliance on fossil fuels. However, as Iceland looks toward the future, the challenge will be to expand clean electricity in order to power other sectors like transportation, heating, and industry, which will require a substantial increase in electricity supply.

Is Electricity Growing in Iceland?

Despite Iceland's current success with low-carbon electricity, the overall consumption of electricity per person has decreased. The latest data shows 46,352 kWh per person, which is a significant decline from the previous record of 56,809 kWh per person set in 2015. Similarly, low-carbon generation has fallen to 46,335 kWh per person from the previous record of 56,797 kWh per person. These figures indicate a worrying trend; if Iceland is to lead the charge in electrifying other sectors sustainably, electricity generation must grow in line with past achievements to meet future needs.

Suggestions

To increase low-carbon electricity generation, Iceland should explore augmenting its portfolio with solar and nuclear energy. As solar technology continues to advance, its potential has increased dramatically even in northern countries, and Iceland could harness this clean resource more effectively. Furthermore, nuclear energy represents a continuous, high-output solution that could significantly bolster the country’s electricity capacity. By considering these additions, Iceland can prepare for a green energy future, facilitating further electrification of new sectors and reducing carbon emissions dramatically.

History

The history of low-carbon electricity in Iceland is marked by significant growth, particularly in hydropower and geothermal energy. In the late 1990s, both energy sources saw notable increases, with geothermal contributing 0.5 TWh in 1999 alone, complemented by ongoing hydro expansions. Throughout the 2000s, major developments continued, including a large increase in 2008 when hydropower grew by 4 TWh alongside the steady rise of geothermal sources. This period set the stage for Iceland's current energy landscape. However, recent years have not seen the same level of robust growth, with setbacks like geothermal's decline by 0.5 TWh in 2025. This underscores the need for a renewed focus on expanding low-carbon initiatives, ensuring Iceland doesn't merely sustain its achievements but also prepares for future electrification demands.

Electricity Imports and Exports

Balance of Trade

* 12M = Last 12 months (Jun 2025 – May 2026) — a rolling 12-month period, not a calendar year.