How Iceland Became a World Leader in Renewable Energy | OilPrice.com

Iceland is a world leader in renewable energy production and has long developed its natural resources to enable a green revolution. The Nordic island nation is home to abundant geothermal and hydropower resources, and has also significantly developed its wind energy sector in recent years. Despite huge strides in renewable energy development, putting the country ahead of the competition, the Icelandic government has big plans to develop even more clean energy by harnessing the power of its volcanoes in a unique project.

Iceland aims to achieve carbon neutral emissions by 2040 and is well on its way to achieving that. By April 2024, 100 percent of homes across the country were heated with renewable energy, a feat few countries have achieved. This was largely supported by the rapid development of the country’s geothermal resources. Iceland increased its geothermal electricity production by 1,700 percent between 1990 and 2014, using the power of its natural resources to drive a green transition.


Iceland’s geothermal resources provide about 30 percent of the energy mix the country uses to power itself. Energy companies transport geothermal water directly from the source to homes and use boreholes to send the hot water through pipelines. This is relatively easy because many of Iceland’s geothermal resources are located at surface level and not deep underground. Iceland has a geothermal energy generation capacity of approximately 755 MW, making it one of the world’s largest geothermal energy producers.

The Hellisheidi geothermal power plant in Iceland is one of the ten largest geothermal power plants in the world. It generates 303 MW of electricity and 400 MW of thermal energy. In 2021, the operators launched a capture and storage (CCS) project at the site, claiming it was the largest CCS plant in the world at the time. This has helped reduce the already low carbon emissions associated with geothermal energy production.


The Scandinavian country also produces vast amounts of hydropower, which accounts for about 70 percent of the energy mix. Iceland uses the meltwater rivers that flow from huge glaciers to produce its hydropower. The country’s extensive experience in hydropower has led Icelandic experts to develop many other hydropower projects around the world.




Known as the land of ice and fire, Iceland plans to not only use its easily accessible geothermal resources but also develop new technology to tap its extremely hard-to-reach energy potential. Iceland is developing the Krafla Magma Testbed (KMT) project to try to access energy deep within its volcanoes. Temperatures at Krafla, one of the most active volcanoes in the world, can reach 1,300°C, which if accessible could provide a huge amount of clean energy. Experts now plan to drill into a volcano’s magma chamber to access the vapors to produce green energy.

Although the Icelandic government is actively pursuing the Krafla project, access to the volcano’s energy will be extremely difficult because the machinery needed to implement the project does not yet exist. The temperatures in the magma chamber are simply too high for existing technology. However, this isn’t the first time scientists have drilled into magma in Iceland; explorers accidentally encountered magma while drilling the IDD-1 project in 2009. The project ultimately failed due to the technological limitations of the time. Nevertheless, it provided great insights, as in a flow test about a year after the first drilling, researchers found that the well was about ten times more powerful than the average well in Krafla, demonstrating the enormous potential to tap into the power of magma.

The KMT team, supported by the Government of Iceland, is currently drilling KMT-1, a monitoring and volcanic research well, and KMT-2, an energy research well. These will be used to collect data to better understand the scope of the project. The team is working closely with the sensor community to develop new temperature sensors and temperature-resistant technologies to collect and assess samples from the volcano. This will not only help the team understand the potential for energy production, but it could also help them better predict volcanic events and thus improve early warning systems for eruptions.


Björn Þór Guðmundsson, from the KMT project, explained: “Reducing the uncertainties about the conditions in KMT’s magma will reduce start-up costs. KMT aims to revolutionize the geothermal industry by to improve geothermal energy economics by up to an order of magnitude, which was shown to be the difference between a conventional well in Krafla and the IDDP-1 well, which accidentally penetrated magma. This will be done by designing new innovative production wells that can withstand near-magma conditions.

While we are likely still a long way from achieving advanced geothermal energy production from magma chambers in volcanoes, the KMT project could provide the information needed to significantly improve the technology needed to access this energy source. Furthermore, Iceland’s long history of geothermal energy production and abundant natural geothermal resources make it the optimal environment to develop these ambitious volcano projects.

By Felicity Bradstock for Oilprice.com

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