2024-01-08 07:30:16
Thanks to its geothermal and hydroelectric power plants, almost all of the electricity consumed in Iceland comes from renewable energies. But to sell its low-carbon production, this country has had to attract numerous electro-intensive industries to its island. It relies in part on innovation to reduce its CO2 emissions.
In terms of electricity mix, Iceland represents a special case in Europe since almost 100% of its electricity consumed comes from renewable energies. This small island country, with an area of 103,000 km² and which describes itself as a “land of fire and ice”, has been able to take advantage of its natural resources. Located at the junction of two tectonic plates with high volcanic activity, it exploits their potential by producing geothermal energy. And thanks to the glaciers which cover more than 10% of the territory, their melting feeds glacial rivers which contribute to the production of hydroelectric energy.
Result: around 73% of electricity comes from hydroelectricity, from power plants which mainly belong to Landsvirkjun, the national electricity company. The remaining 27% comes from geothermal energy, which also allows 9 out of 10 homes to be heated more, thanks to the thermal energy produced.
This shift towards green electricity production dates back to the 1970s. Previously, the country had to rely on imported fossil fuels to ensure the majority of its energy consumption. But this transition was not made for environmental reasons. At the time, the country no longer wanted to depend on variations in the price of oil caused by the repeated crises that hit the global energy market. Isolated at the edge of the Arctic Circle, it needed to regain a certain energy autonomy, with resources that were stable and cheap.
If today Iceland is an example in terms of clean energy, its CO2 balance is, however, less idyllic. The island might have difficulty meeting certain international climate change targets. The method of electricity production is not in question. Certainly, the drilling necessary for the production of geothermal energy results in CO2 emissions, but in smaller quantities than electricity of fossil origin. The main problem lies in the quantity of electricity produced in relation to the population of this island which has only 370,000 inhabitants.
The world’s largest electricity producer per capita
According to the Icelandic government, the country is the world’s largest producer of green energy per capita and the largest producer of electricity per capita, with approximately 55,000 kWh produced per person per year. For comparison, the European Union average is less than 6,000 kWh. Since this island is located several hundred kilometers from the nearest land, this electricity cannot be exported. Iceland has therefore sought to attract industries with high energy consumption to its territory, which today represent the majority of electricity consumption.
This industrialization continued following the global financial crisis of 2008, as the country needed to revive its economy. New electro-intensive factories, notably for aluminum production, have been established, as well as more recently data centers. At the same time, Iceland has also sought to develop the island’s tourism potential, which until now had been little exploited. Except that this tourism boom has only increased CO2 emissions from the transport sector in particular, which is still dependent on fossil fuels.
Today, the country relies in part on innovation to reduce its greenhouse gases. In 2021, the largest atmospheric CO2 capture plant was inaugurated around thirty kilometers from the capital, Reykjavik. With an initial capacity of 4,000 tonnes of CO2, another was installed nearby the following year and capable of capturing an additional 36,000 tonnes per year. These installations are supplied with renewable energy thanks to a geothermal power plant and the CO2 is injected underground then mixed with water in order to be solidified in the rock more than 1,000 meters deep. Other projects of this type are underway in the country.
To finance these investments, Iceland has recently decided to increase its taxes on the tourism sector, which represents around 6% of GDP. From January 2024, plane tickets, hotel nights and tourist attractions will cost travelers a few euros more. The country aims to carbon neutrality by 2040, ten years before the European Union.
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