As more countries plan on achieving a green energy transition, Iceland offers guidance on how to effectively harness the power of geothermal.
margining Iceland without geothermal energy would require turning back the clock half a century. Geothermal energy is a large part of everyday life, and its successful utilization has completely changed living standards throughout the country. Icelanders use geothermal resources to generate electricity, heat houses and swimming pools, grow food in greenhouses, recycle plastics, and produce a variety of skincare products. Furthermore, geothermal power plants have become a hotbed for innovation that deals directly with future challenges such as capturing carbon emissions.
Under the leadership of President Biden, the United States has shown a growing interest in harnessing geothermal energy resources. To support this goal, the U.S. Department of Energy recently announced a $20 million funding initiative for geothermal drilling technology projects and an $8.4 million investment in accessing geothermal potential from abandoned oil and gas wells. With a current installed generation capacity of 3,722 MW, the U.S. leads the world in geothermal energy production and aims to further develop this resource to support a cleaner and more sustainable future.
In the global effort to transition from fossil fuels to renewable energy, Iceland has emerged as a leader in promoting geothermal energy as a viable alternative.
Iceland is a global leader in renewable energy, with all of its electricity now generated using sustainable sources. Geothermal energy plays a significant role in Iceland's energy mix, powering about 90% of the country's central heating and 30% of its electricity. The remaining 70% of electricity is generated from hydropower. Iceland boasts both high-temperature and low-temperature geothermal resources, with six geothermal power plants in operation, including the Bjarnarflag Geothermal Station, which has been operational since 1969. Geothermal energy is a reliable and long-term investment as a base-load renewable energy source.
ON Power, headquartered in Reykjavik, is a leading renewable energy company in Iceland, with geothermal and hydropower plants. The company promotes geothermal energy as a viable alternative for countries with suitable geothermal resources for electricity production. The Icelandic example shows the importance of renewable energy for space heating, which requires lower temperature geothermal resources than electricity production. This approach can be applied in other countries as they move towards decarbonizing their heating systems, as seen in the European Union's recent efforts to transition to more sustainable heating and cooling.
Iceland's commitment to clean energy has attracted investment from energy-intensive industries such as aluminum smelters, which are drawn to competitively priced and reliable electricity. The increased demand for electricity from energy-intensive industries has been met by utilizing hydropower and geothermal resources. Between 1990 and 2014, Iceland saw a 25% increase in population and a 1,700% increase in geothermal electricity production. Data centers looking to operate sustainably have also been drawn to Iceland, where the cool climate allows for free natural cooling, lowering operating costs.
Geothermal power is essential to Iceland's electricity grid, but the country's incredible achievement of having 90% of primary energy use come from renewables in 2020 is largely due to the switch to renewable sources for space heating. The political decision to transition from fossil fuels to renewable sources was made during the 1970s oil crisis, driven by the need for energy security and the economic risk of importing fossil fuels. The investment in infrastructure required to make this transition has paid off, with the National Energy Authority estimating that in 2018, the economic benefits of using geothermal energy instead of oil for space heating were equivalent to 3.5% of Iceland's gross domestic product. The accumulated carbon dioxide savings from using renewable energy instead of oil in Iceland are estimated at more than 433 million tons, made possible by harnessing the power of natural geothermal and hydropower resources.
While Iceland has set an excellent example for green electricity production and house heating, a third energy transition is underway, this time in transportation. Success in this area is essential for Iceland to achieve its goals of reducing carbon emissions by 55% by 2030, achieving carbon neutrality by 2040, and becoming one of the first nations to be free of fossil fuels.
