Where to See the Northern Lights in Reykjavík

Northern Lights in Iceland

Seeing northern lights is a dream for many. In Iceland, the lights are usually green but sometimes purple, red and white. They can be seen on dark nights if their activity is high and the skies are clear. The northern lights have a schedule of their own and can be quite unpredictable. But if you’re in Iceland between September and April, remember to look up when the skies are clear. Like stars, you can best see these wonders away from the pollution and city lights; the darker the surroundings, the better. If you’re staying in Reykjavík, you don’t need to go far. Here are some of the best places to see the northern lights more clearly.

Northern lights in Iceland
Photo: Golli.

Grótta in west Reykjavík

Grótta is a small island connected to the Seltjarnarnes peninsula, about six kilometres [3.7 mi] west of Hallgrímskirkja. Due to its location, there are minimal city lights and pollution, giving you a higher chance of seeing the northern lights. Grótta’s lighthouse adds to its picturesque coast, creating a tranquil experience as you gaze at the lights.

To get there, you can take bus route 11 from Reykjavík city centre and get off at Hofgarðar. It is a 1.3 km [0.8 mi] walk from the bus stop to the vantage point.  You can also travel by car, bicycle, ride-share, scooter, or on foot.



Grandi harbour district

This area of Reykjavík is about two kilometres [1.24 mi] from the city centre. This neighbourhood has been growing in recent years, and you will now find various boutiques, restaurants and museums in the Grandi area. Due to its location on the waterfront, it is an excellent viewing point away from the city lights. You can get there by foot, car, bicycle or scooter, or take bus route 14 to Grandi bus stop. The best vantage point is on the northern tip, so walk up Eyjaslóð street along the water.

Perlan, Reykjavík, Iceland at sunset
Photo: Perlan’s 360° sightseeing platform offers great vantage points.

Perlan sightseeing platform

Perlan museum is in Reykjavík, just two kilometres [1.24 mi] south of the city centre. A large sightseeing platform wraps around the glass dome, where you have a 360° panoramic view of Reykjavík and beyond, which offers a great, unobstructed vantage point to see the Aurora.

To get to Perlan by bus, you can take bus routes 13 or 18. You can also travel by foot, ride-share, bicycle, or scooter. You can buy tickets to the sightseeing platform at Perlan’s reception for ISK 2,990 [$22, €20]. The observation deck is open until 10 PM, giving you ample time to observe the lights.

Northern lights and the peace tower in Iceland
Photo: Golli. The Northern Lights Yacht Cruise invites for beautiful views of the bay.

See the Aurora from a yacht

The Northern Lights Yacht Cruise will give you incredible views and the ability to see the Aurora more clearly. The two-hour cruise leaves from the old harbour in Reykjavík at 10 PM and is for those aged seven and older. As of 2024, the price is ISK 14,700 [$107, €99] per person, including blankets, Wi-Fi and a guide.

For an even better vantage point, there are more northern lights excursions, many of which depart Reykjavík city centre. You can also rent a car and chase the Aurora on your own.

No luck?

If you are not fortunate enough to catch the northern lights while in Iceland, you have other options. You can opt for a virtual experience by going to Perlan and experiencing them in the planetarium or to the Aurora Northern Lights Center in the Grandi harbour area, where you can admire the lights through VR goggles.

Perlan Planetarium Northern Lights
Photo: The northern lights in Perlan’s planetarium.

To keep track of the best times to see the northern lights in Iceland, using apps such as My Aurora Forecast & Alerts can better your plans. You can also visit the Icelandic Met Office’s website, where you can see the Aurora forecast. Note that on their map, the white areas indicate clear skies and a higher chance of seeing them. You will find their activity level in the upper right corner.

You can click here for a map of the Northern Lights viewpoints.



Landsvirkjun Restrictions to Last Longer than Expected

Landsvirkjun, the National Power Company of Iceland, has had to restrict power supplied to industrial production companies to a greater degree than expected, RÚV reports.

Though the power company often reduces its production in the winter, poor reservoir conditions have led to a greater than usual reduction in service. The reductions could have an impact in the hundreds of millions of ISK.

Nearly 10% of power

The reduction began shortly before the new year, and now amounts to around 10% of power delivered to industrial production companies.

In a statement to RÚV, Director of Management Valur Ægisson stated that the ongoing restrictions can be chalked up to poor water flow, as water levels in reservoirs have dropped rapidly. He cited that Blöndulón, a reservoir in North Iceland, has never been this low at this time of year.

The restrictions were initially applied to fish processing plants and data centres. However, restrictions were then also applied to industrial plants such as Elkem, Norðurál, and Rio Tinto.

Waiting for spring

Valur stated further to RÚV that the extent of the restriction amounts to tens of gigawatt-hours per month. The average monthly sales of Landsvirkjun are around 1250 gigawatt-hours.

The restrictions could result in considerable lost revenue for Landsvirkjun. “I can’t give an exact figure, but it measures in hundreds of millions,” stated Valur to RÚV.

Like much of the nation, the situation has the energy company waiting on the arrival of spring and the accompanying meltwater.  “That’s essentially what we’re waiting for, for warmer weather, rain, and see the snow melting in the highlands. When that happens, we can turn things around relatively quickly,” Valur stated.

 

 

The Icelandic Financial Crisis

Protest in Iceland 2008

What led to the Icelandic financial crisis in 2008? What were the consequences of this troubled economy, and how did the nation manage to recover? Read on to learn more about this dark chapter in Icelandic history. 

Understand that the world of finance is shadowy and complex. Going forward, we will attempt to break the details down so as to be accessible for most readers. 

Even so, the fluctuations of a local economy – let alone a global market – is a subject one could devote their lives to without fully understanding its details. 

In fact, it is from within that misunderstanding that the foundation of this article is laid. 

So, let’s begin with the basics.

How do Icelanders view money?  

Finances in Iceland
Photo: Golli. Stacks of Icelandic krona.

For most people, money can be simplified into earning enough to pay for one’s food, shelter, and entertainment. Putting it bluntly, making money is the engine that drives societies such as ours, and oftentimes, it is from one’s occupation that people derive meaning.

Icelanders are no different in this respect, often choosing to pursue career opportunities that satiate their personal goals rather than mere financial gain. 

Ultimately, the majority of folk – Icelanders included – are content accepting that money is not the be-all and end-all in life. Instead, it is better looked at as a means of securing a comfortable and engaging life.

Shopping in Iceland
Photo: Golli. Icelanders shopping in downtown Reykjavik.

However, some people have a rather different opinion. For bankers, investors, and financial analysts, the concept of money is a constant back-and-forth that involves borrowing, interest rates, debts, and keeping a close eye on international markets. 

As is to be expected, this latter group can often have a great impact on the former, regardless of whether the results are desired or not. Such a philosophy even has a name – crony capitalism

As it so happens, Iceland is a capitalist country; one with a small population that has yet to surpass 400,000 people. Given this pairing, nepotism and corruption have long been a reality of life here. Some people continue to believe that personal gain, both for the individual and those closest to them, trumps what might be more beneficial for the nation at large. 

In that sense, Iceland is hardly different than anywhere else. But unfortunately, the consequences of such selfish thinking tend to impact a greater percentage of people on a small island than it might otherwise do in a larger, less corruptible republic.

What happens when the markets crash? 

 

 

One of the most dramatic economic events to affect life in Iceland began in 2008. The grand scale of it cannot be overemphasised, and not just for those living here. In fact, 2008 was one of the first times in history that the entire world turned its attention to this small Nordic island. 

As you might imagine, this spotlight was not cast for the best of reasons… We talk, of course, about the Icelandic financial crash. 

It was not purely Iceland’s economic woes that drew people’s notice. Rather, it was how these troubles influenced global events, particularly the markets in their own countries.

The Icelandic financial crash is often considered to be the straw that broke the camel’s back in regards to the global recession that would follow. It was, by most accounts, the first pillar to topple what had, until then, been thought of as a profitable and structurally sound pecuniary model the world over.

What led to the Icelandic financial crisis? 

Íslandsbanki headquarters in Reykjavík
Photo: Golli. Íslandsbanki headquarters in Reykjavík

The origins of the financial crash in Iceland can be traced to 2001. It was in that year that the banks were deregulated. In essence, this deregulation meant that Icelandic banks – namely, Landsbanki, Glitnir, and Kaupthing – could all operate using foreign currency. In the short term, this proved to work wonders for the Icelandic economy, as it continued to experience rapid growth right up until 2008. 

With deregulation came the need for banks to expand. This expansion could only be achieved with the adoption of increasingly aggressive lending practices aimed at both residents in Iceland, and those living beyond its shores. In particular, the real estate sector proved to be the juiciest target.    

The expansion of the banks was bolstered by taking loans from the interbank lending market. They also increased levels of external debt by taking deposits from outside of the country. 

As early as 2007, The Economist magazine ranked the Icelandic krona as the most overvalued currency in the world. For many, this should have been a clear indicator that local financial practices were not sustainable.

Waves crashing over Reykjavík lighthouse
Photo: Golli. Waves crash over lighthouse in Reykjavík winter storm

When an economic bubble bursts… 


However, little consideration was given to the fact that there was no lender of last resort. When it came to refinance the debts accumulated, it quickly became apparent that the banks had no foreign currency to pay them off.

Around this time, household debt also rose to 213% of a family’s disposable income. This imbalance soon led to inflation, which in turn, forced a hike in interest rates. In response, the Central Bank of Iceland began offering liquidity loans to other banks based solely on newly-issued bonds. 

While this might sound complicated, understand it for what it really was – the Central Bank was doing little more than printing new money. 

By September 2018, interest rates in Iceland were at 15.5%, far higher than in other European countries. For example, the United Kingdom only held interest rates at 5% at that time. This divide caused foreign investors to withhold depositing Icelandic krona, creating even higher monetary inflation, and ultimately, an economic bubble within which financiers continued to overestimate the value of Iceland’s currency.

What were the consequences of the Icelandic financial crash? 

Bjarni Benediktsson icelandic politics
Photo: Golli. Former minister of Finance, Bjarni Benediktsson

In the years leading up to the crisis, Iceland’s economy was extremely reliant on its financial sector. Following the closure of its banks, both businesses and individuals immediately felt the shockwaves. 

Having been valued far too highly for far too long, the worth of the Icelandic krona dropped considerably. As a consequence of this devaluation, many Icelanders lost their life savings, and unemployment rose considerably. It was the first sign of the recession to come, not just in Iceland, but around the world.

Overseas, it was those who held close ties to Icelandic banks that suffered the most. Beyond the tribulations these investors felt personally, the losses they accumulated through their association with Iceland would further contribute to the broader global crash.

The government’s last stand 

Alþingi parliament of Iceland
Photo: Golli. Alþingi, the Parliament of Iceland

Even amongst casual observers, the writing on the wall was obvious. And so, when the Icelandic banking system collapsed, few people were shocked by it. 

Now in the midst of a recession they had partly caused – plus no banking system to speak of – the Icelandic government quickly found themselves faced with enormous pressure to stabilise the economy. It would prove to be a challenging balance act between satisfying the demands for accountability with practical steps to prevent any further collapse from happening. 

In doing so, the government introduced sweeping changes across the financial sector. These included implementing capital controls to help steady the currency, as well as bailing out, restructuring, and nationalising the banks. Not only that; the government also chased down fiscal stimulus programs that might help boost economic recovery, as well engaged in negotiations with international creditors. 

Central Bank Ásgeir Jónsson seðlabankastjóri
Photo: Golli. Current Central Bank Governor, Ásgeir Jónsson

Still, many ministers realised they would soon be forced to resign, and mass protests – some of which became violent – continued to plague those responsible for leading the country. Iceland’s leaders realised quickly what others already knew; the road to full economic recovery would be a long and arduous journey. 

But even having come to this conclusion, there was no resting easy for government officials, nor those in charge of Iceland’s beaten down banks. As it stood, trust in the country’s financial institutions was at an all time low.

Resilient as ever, the Icelandic people demanded blood. And one way or another, they would get it. 

The Icelandic People demanded change

Photo: Golli. Pots and pans revolution protest outside of Alþingi, Iceland’s Parliament.

In true Icelandic style, the protests began with a single man – a popular songwriter by the name of Hörður Torfason. Having staged himself with a microphone outside of the parliament building on Austurvöllur, he invited others to express their frustration with the government. 

By the following week, these protests had become larger and more demonstrative. Participants organised themselves into an outfit called Raddir fólksins (Voices of the People.) They promised to vent their anger every Saturday until the government stepped down.

 

 

These protests would come to be known as the Kitchenware Revolution, or by others, the Pots and Pans Protests. As part of the growing unrest, the largest protest ever to take place in Iceland happened on 20 January 2009. 

These protests largely came to an end following the resignation of members of the Independence Party. In its place, a new left-wing government was formed, having had the support of the protesters. Iceland’s former prime minister, Geir Haarde, faced prosecution at Landsdómur, or the National Court, though ultimately, he would be found non-culpable.  

Recovery from the Icelandic Financial Crisis

Photo: Bjarki Sigursveinsson. CC. Flickr. Eyjafjallajökull erupts!

Whereas other countries opted for austerity, bank bailouts, and low inflation, Iceland decided to go in another direction. It would be a risky reaction that actually turned out to work in its favour. But aside from the changes mentioned, the tourism boom would ultimately be the saving grace in rebuilding Iceland’s economy.

Sudden interest in the country peaked during the 2010 eruption at Eyjafjallajökull. Putting that in the timeline, this event occurred a little over halfway into the financial crisis. For locals, the eruption was an uncomfortable distraction from their recently emptied wallets. But for many abroad, it was their first introduction to what would become known as the land of ice and fire.

 

 

Global news coverage broadcast compelling images of this dramatic geological event. A snow-laden mountain scorched with fire. A black column of ash and glass filling an empty blue sky. That last sentence is particularly accurate. The density of the ash pushed into the atmosphere created enormous disruptions in air travel, and many passengers found themselves stranded, waiting for the eruption to end and the air to clear. 

These pictures – and numerous flight cancellations – filled people with curiosity as to what life in Iceland was really like. It was an inquisitiveness bolstered with fascinating B-roll of Iceland’s nature; of dark pebble beaches, sweeping white glaciers, endless moss-covered lava fields. Before Icelanders had a chance to prepare themselves for the societal changes that tourism would bring, excited vacationers were booking their tickets. 

Fireworks on New Year's Eve.
Photo: Golli. Fireworks on New Year’s Eve.

Rebuilding the Icelandic Nation 


By 2012, Iceland’s miraculous recovery was being cited as a success story among other nations. Unemployment rates had dropped to 6.3%, partly on account of how Icelandic officials began to appeal to immigrants.

In April of the next year, a new government was formed, setting about a process by which many of the former bank directors were sentenced for their part in the financial meltdown of 2008.

As of today, the consequences of this dark and complex time continue to reveal themselves. For example, Iceland is still very dependent on tourism, pouring billions of krona into marketing campaigns each year to ensure it remains a bucket-list destination for prospective travellers.

túristi tourist ferðamaður tourism
Golli. Tourists in front of Esja on Sæbraut in Reykjavík

Government officials must also continue to balance the debts they incurred attempting to pull the island out from its economic woes.

Finally, much of public discourse has been shaped by these events, and stricter measures on lending, borrowing, and trading remain in place so as to avoid repeating mistakes of the past.

Going forward, we can only hope these lessons have been learned for the last time. 

March Labour Report Shows Slight Decrease in Unemployment

reykjavík construction

The monthly report issued yesterday by the Directorate of Labour shows a slight decrease in March unemployment numbers.

The Directorate of Labour report shows March 2024 unemployment rates sitting at 3.8%, a decrease from February’s rate of 3.9%. In total, the report shows an average of 7,518 unemployed individuals in March 2024.

Differences by gender, region

Of the total unemployed in March 2024, some 4,344 were men, and 3,174 were women.

There were also some regional differences in unemployment. As might be expected, unemployment rates were higher on the Reykjanes peninsula, the area affected by the ongoing eruptions near Grindavík. Unemployment on the Reykjanes peninsula was recorded at 6.5% for March 2024, a slight decrease from 6.9% in February.

Unemployment rates generally went down for the entire nation except in the capital region. In the capital region, rates remained stable at 3.8%.

North Iceland saw the lowes rates, at 1.5%, and the next-lowest rates were recorded in East and West Iceland, around 2.7%.

Other figures from the report

A total of 283 new jobs were advertised in March through the Public Employment Service.

In March, 81 individuals received recruitment subsidies within companies or institutions, and eight individuals received start-up subsidies.

In March 2024, the Public Employment Service issued 142 work permits to foreign nationals to work in Iceland, 110 of which were in the capital area.

 

 

 

Rainy Across Most of Iceland Today

rain iceland traffic

Today, April 11, will be rainy across much of the nation.

By evening, a low-pressure system will move over the southern parts of the country and then towards the east. The Met Office expects this will decrease winds and precipitation for most of the nation.

Rain and sleet for much of Iceland

Much of South Iceland, including the capital region and the South Coast, will be rainy today. The precipitation will change to sleet and snow in more northerly parts of the country, and higher elevation areas. Much of East and Northeast Iceland can expect snow today.

West Iceland, including the Snæfellsnes peninsula and the Westfjords, will be comparatively dry.

Temperatures mild around capital, colder in the North

Temperatures will range from around freezing to 8° C [46° F] throughout Iceland today. The mildest temperatures will be felt along the South Coast. The capital region is expected to be slightly cooler, around 5° C [41° F].

Temperatures will drop up north and in higher elevation areas, such as the highland. East and Northeast Iceland, in addition to the Westfjords, can all expect temperatures hovering around freezing today.

Wind sharper in the South

East and northeast Iceland will see moderate wind gusts, with sharper winds in the south. The Met Office predicts that winds will sharpen in the late morning, and it advises drivers in South Iceland to exercise caution.

As the day wears on, winds in Northwest Iceland are expected to pick up.

Useful resources for travellers

As always, travellers are advised to stay up to date with the latest weather conditions in Iceland.

Get the latest updates on weather at the Icelandic Met Office.

Live updates on road conditions in Iceland.

General safety tips at Safetravel.

Travellers in Iceland may also find our guides on driving in Iceland during the summer and winter helpful.