Of all stationary energy produced in Iceland, some 70% is hydroelectric and 30% is geothermal, with a negligible but growing percentage of wind power, at .03%. Fossil fuels accounted for .01% of all energy produced in Iceland in 2021.
Iceland has become well-known for its ability to produce green energy relatively cheaply and efficiently. However, this picture has grown somewhat more complicated in recent year with Iceland’s participation in the international carbon credit market.
Read more: Iceland to Buy Emission Allowances
In figures recently released by the National Energy Authority on 2021 energy usage in Iceland, it has come to light that 63% of energy used in Iceland was produced by fossil fuel, 24% by nuclear power, and only 13% by renewable energy sources. Although the actual electricity flowing into Icelandic homes and businesses is still green, the energy credit market allows foreign companies to “buy” Icelandic green energy. In this way, consumers in Europe might choose to buy green certificates of origin for their energy, even though the energy actually powering their house is sourced from a coal plant.
This market dynamic has led to a curious situation: although the electricity flowing into Icelandic homes and businesses is 100% renewable in origin, Icelandic consumers are now being made to pay extra for green energy certification. Some 90% of energy produced in Iceland is now sold on renewable energy credit markets.
For those interested in Iceland’s energy production, you may want to read more at the National Energy Authority of Iceland.