Towards an Icelandic Sustainable Energy System

Abstract

Abstract Approximately 85 per cent of primary energy use in Iceland in 2019 is derived from domestic renewable energy, primarily hydropower and geothermal energy. This share of modern renewables in primary energy use is one of the highest in any national energy budget. To get to this point the Icelandic energy system went through three energy transitions dating back to around 1900, and currently has begun the fourth and final step towards fully relying on renewable energy. This chapter analyses the story of how Iceland, seemingly without a formal and a holistic energy policy package succeeded in transitioning to large-scale use of renewable energy at considerable benefits to the Icelandic nation, including improved energy security and reduced costs. This story has now culminated in a strategic policy document agreed to by members of all political parties with members in parliament during 2017–2021, aiming to fully transition to a 100 per cent renewable energy economy and thereby complete the transition. The story illustrates: i) how the combination of necessity driven by crisis such as the energy crisis (now climate change) and the drive of local entrepreneurs and decision makers led to a final outcome that with the climate emergency is now what most nations aspire to and ii) how development of diverse policy fragments, somewhat coincidentally slowly moved the system in the same direction, illustrating how the lack of a formal process or a cohesive policy can in the end result in a successful outcome.