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Iceland

Iceland statistics

Area: 
103,000 sq km
Population: 
317,351 (July 2014 est)
Installed hydropower capacity: 
1.9 GW (2012)
Hydropower generation: 
12.2 TWh (2012)

Iceland, situated between Canada and Scandinavia in the North Atlantic, is already 99.9 per cent powered by renewables – 71 per cent from from hydro – with reservoirs, rivers and lakes accounting for around 6 per cent of the total land area.

This only tells part of Iceland’s remarkable story. Total electricity generation in 2013 was 18,116 GWh, or a massive 56MWh/year for each of Iceland’s 326,000 population (or four times the USA’s 12.8MWh/year/person).

This remarkable resource has driven rapid economic development. In 2012, industry accounted for 83 per cent of total electricity consumption, and domestic use just 5 per cent. The energy-intensive aluminium smelting industry alone accounted for 71 per cent of the total. A recent study funded by Samál (the Icelandic Association of Aluminium Producers) estimated that this industry accounted for 6–7 per cent of the country’s GDP. 

Data centres

The national energy authority, Orkustofnun, estimates that the energy potential of Iceland’s precipitation is 285 TWh/year of which 64 TWh/year is harnessable energy compared to today’s generation of 12.9TWh/year. The Icelandic economy is not large enough to require such enormous quantities of electricity, at least at this stage in its development. In order to spur development and use its abundant resources, Iceland is now working to repeat the aluminium success with smaller industries such as data centres.

These require not just huge amounts of electricity, of which the country has a huge abundance available at low cost, but also cooling, which is not difficult for a country on the edge of the Arctic Circle. Zero-carbon electricity is also highly attractive to such an industry. 

The pitch is already working – data centres have been set up, and Iceland is connected by submarine data cables to Denmark, Canada, Greenland and the UK to ensure that the data can be transmitted extremely fast. There is, of course, still considerable room for expansion.

Another route being explored is the export of some of this clean energy from hydro and geothermal resources via an HVDC interconnector to the United Kingdom or mainland Europe, with a £4bn 1 GW cable project to connect to the UK currently under discussion between the governments.

By far the largest hydropower station is Fljótsdalur (690 MW), which is operated by the state-owned generator Landsvirkjun.  This uses glacial rivers from the Vatnajökull glacier in north-east Iceland. The largest of the dams in the complex (Kárahnjúkar) is 198 m high and 700 m long, with a head of 599 m.

Landsvirkjun is the largest operator – with 75 per cent of generation – although HS Orka and  Orkuveita Reykjavíkur also operate large plants.


This country profile was last updated in August 2014. You can find all our latest country profiles and regional overviews in the 2016 Hydropower Status Report, which you can download here.