Photo of people swimming and floating in turquoise-blue waters under dark blue skies. A geothermic power station looms in the background.

People bathe in the soothing, mineral-rich waters of Iceland's Blue Lagoon. The lagoon was created by run-off from the Svartsengi power plant, which pumps geothermally heated water up from a mile below the surface.

Iceland is a partner and steering committee member of the international partnership for Energy Development in Island Nations (EDIN). This nation's use of renewable energy has established a benchmark that other islands can follow.

Renewable Energy Resources

Iceland is an island country whose energy use per capita is among the highest in the world. The proportion of energy provided by renewable sources in Iceland also exceeds that of most other countries. Nowhere else do geothermal resources play a greater role in providing a nation's energy supply. Renewable energy provides

  • 100% of energy production and consumption—including electricity and direct uses of energy for heating and industrial processes, but excluding transport
  • 81% of primary energy—energy that has not been subjected to a conversion or transformation process; geothermal energy contributes 66% of this amount
  • 88% of heating for houses, from geothermal resources.

Oil is still required to meet 19% of Iceland's energy demand, primarily for transportation and the fishing fleet.

All the energy produced in Iceland is consumed by inland consumers, because the Icelandic electricity system is an isolated hydro-based system without links to outside power markets. Hydropower produced 70% of Iceland's electricity in 2007, and geothermal power produced 30%.

Policies and Goals

The Icelandic government's energy policy is to promote the use of clean and renewable geothermal and hydropower energy resources in harmony with the environment by

  • Conserving valuable natural areas in Iceland
  • Delivering a plan for reducing greenhouse gas emissions
  • Promoting sustainable development
  • Diversifying industrial activity and economy
  • Increasing forestation and land reclamation to bind atmospheric carbon
  • Increasing the use of environment-friendly vehicles.

Research and Development

Iceland also supports research in renewable energy and the sharing of knowledge. Thanks to its success in Iceland, the geothermal industry has been increasingly exporting its know-how to other countries, both as consultants and as investors at the feasibility stage. In addition, the Icelandic government provides grants to various projects, with an emphasis on finding usable geothermal water for space heating in areas where resources have not yet been found.

This report, South Pacific Islands—Geothermal energy for electricity production, offers an example of how Iceland's geothermal industry has been helping other countries assess their resources. The report summarizes the geothermal energy in the South Pacific Islands and explores the possibilities for the Icelandic International Development Agency to assist these small countries in utilizing this energy.