Iceland has made remarkable strides in its electricity sector, as evidenced by its near-complete reliance on low-carbon sources for power generation. Between May of last year and April of this year, more than 99.98% of Iceland's electricity was generated using low-carbon energy sources. Specifically, hydropower contributed a significant portion, with around 71%, while geothermal energy accounted for about 29%. This impressive accomplishment sets Iceland apart as a global leader in clean electricity. The primary challenge moving forward is to expand electricity supply to meet the growing demand spurred by the electrification of other sectors such as transportation, heating, and industry. Successfully achieving this will require an emphasis on further increasing its clean electricity capacity.
Is Electricity Growing in Iceland?
Despite the current reliance on low-carbon energy, Iceland's electricity consumption trends have been in decline. The latest data for 2025 shows that electricity use stands at 47,178 kWh per person, a notable drop from the previous peak consumption of 56,807 kWh per person in 2015. This represents a significant reduction of roughly 9,629 kWh per person. The generation from low-carbon sources also follows a similar downward trajectory, with the current generation at 47,170 kWh per person, compared to the 2015 record of 56,795 kWh per person. This reduction of 9,625 kWh per person signifies a concerning trend, especially as Iceland seeks to electrify more sectors of its economy. The declining figures highlight an urgent need for strategic growth in clean electricity generation to sustain and advance Iceland's clean energy leadership.
Suggestions
To enhance its low-carbon electricity generation, Iceland could explore a range of strategies. One approach is to expand its hydropower and geothermal capacities, optimizing existing resources for greater output. Additionally, Iceland could consider further diversifying its energy mix by introducing new technologies such as nuclear and solar power, both of which provide sustainable options for clean electricity. Energy innovations, like improved grid infrastructure and energy storage solutions, can also play a crucial role in maximizing the efficacy of low-carbon resources, ensuring that supply keeps pace with increasing demand as more sectors transition to cleaner energy practices.
History
Historically, Iceland's energy landscape has seen various phases of development, primarily through hydropower and geothermal sources. Significant growth occurred in the late 1990s and early 2000s, with hydropower increasing by 0.4 TWh in 1997 and 1998, alongside geothermal's rise in 1999 by 0.5 TWh. The 2000s marked another wave of expansion, notably between 2006 and 2009, with geothermal and hydro gains improving supply. A particularly sharp increase took place in 2008, when hydro surged by 4 TWh, complemented by a 0.5 TWh rise in geothermal. More recent years have seen fluctuations, but the consistent upward trend pre-2024 attests to Iceland's ongoing commitment to clean electricity. While 2024 saw a setback with reduced hydro and geothermal outputs, recognizing and learning from historical successes can guide future efforts towards sustained growth in clean energy generation.
Electrification
We estimate the degree of electrification by comparing electricity and total energy emissions. More about methodology.