Iceland example shows cost-competitiveness of geothermal energy

Over the years Iceland has become something of a synonym for geothermal energy. This renewable energy source with vast potential is still in its infancy in many countries of the world while Icelanders are the ones incapable to imagine the life without geothermal energy and are very proud about their geothermal energy heritage.

Geothermal energy does not only provide electricity for Iceland, it is also used for heating purposes and is responsible for their lowest heating costs of all the countries in the Nordics.

Finland, Sweden, Denmark, Norway, all these countries have bigger heating costs compared to Iceland. According to one of the recent studies heating costs in Helsinki, capital of Finland, are five times higher compared to Iceland's capital Reykjavik.

In Reykjavik, the annual cost of heating for a 100 square meter apartment is $724, while in Helsinki the annual heating costs rise to $3,623.

Around 90% of all households in Iceland use geothermal energy for heating. With enough available resources this renewable energy source represents not only clean and environmentally friendly energy source, it is also cost-competitive, and even cheaper compared to conventional energy sources.

Other Nordic countries mainly use fossil fuels for heating purposes. The difference is huge, but on the other hand not all countries have the luxury of having such abundant geothermal energy resources at their disposal like Iceland does. In any case, in areas with significant geothermal resources, geothermal energy certainly deserves its chance to blossom, from both environmental as well as financial point of view.

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Iceland is the synonym for harnessing geothermal energy

Iceland's capital Reykjavik has used the geothermal energy for heating purposes for more than 50 years so it's really no surprise that Iceland and geothermal energy go hand to hand and have practically become synonyms. Why geothermal energy for Iceland? Primarily due to the favorable geological location of Iceland and the high concentration of volcanoes (in fact you could even say that Iceland itself is one big volcano) harnessing geothermal energy is much easier and less expensive here than in many other parts of the world. In fact, Icelanders need to consider themselves being very lucky to have this abundant renewable energy resource at their disposal.

Icelanders currently lead the world in harnessing geothermal energy for both domestic as well as industrial purposes. Geothermal heating provides heat to approximately 90% of all buildings in the country. Geothermal heating is primarily used for central heating but also in swimming pools, for soil warming, drying of timber and wool, animal husbandry, as well as some other industrial purposes.

In electricity generation, geothermal energy accounts for 20% of total electricity production in Iceland. The rest doesn't come from coal and natural gas like this is the case in many other countries but from hydropower. Hydroelectric power plants supply 80% of Iceland's demand for electricity. In fact, the total share of fossil fuels in electricity generation is said to be around 0.1 %.

There is a plenty of geothermal energy on Iceland.

The first hydropower plant in Iceland was constructed more than century ago, back in 1904. The largest hydroelectric power station is Kárahnjúkavirkjun with the total installed capacity of 690 MW.

The greatest part in this whole story is that Icelanders are only using small fraction of totally available geothermal energy and hydropower. In fact, according to several recent studies only around 25 percent of hydropower, and only around 20% of the geothermal potential available for electricity production in Iceland, have been used so far. Of course this has lot to do with the fact that Iceland is scarcely populated, with only around 320,000 people living in the entire country. However, energy consumption per capita in Iceland is among the highest in the world with about 28,000 kWh per person.

The abundance of geothermal power and hydropower has made all the difference in Iceland. The richness of these two natural resources is basically all what Iceland has in terms of energy sources, and Iceland is certainly taking full advantage of them. The abundance in geothermal energy and hydropower combined with small number of residents is the reason why Iceland is very nearly to becoming a 100% fossil-fuel-free nation.

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