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Icelandic electricity generation and transmission

The Icelandic electricity generation capacity and production has more than doubled in a decade. Today, the total capacity is 2,669 MW. The annual generation 2011 was 17,210 GWh.


Hydro Power              1,884 MW            12,507 GWh
Geothermal Power       665 MW              4,701 GWh
Fossil Fuels                   120 MW                      2 GWh
Total                            2,669 MW            17,210 GWh

Slide08Close to 100% of the electricity generation in Iceland is produced by harnessing renewable sources. Hydropower is the largest source with close to 73% of the annual generation. Geothermal accounts for about 27% of the generation. In addition, there are a few fossil fuel generating plants.

Several new power stations are under planning (both hydropower and geothermal power). The most recent one (now being constructed in South Iceland) will become operational in late 2013 .

Slide10The power stations in Iceland are located all around the country. The geothermal power plants (marked by red on the illustration at left) are of course to be found where it is easiest to harness the geothermal heat for electricity generation. All the main hydropower stations utilize glacial water, flowing from Iceland’s glaciers.

The largest hydropower system is the Þjórsá and Tungnaá river system in Southern Iceland (marked by a large blue dot on the map at left) . However, Iceland’s largest power station is in the Northwestern part of the country. This is the 690 MW Fljótsdalur / Kárahnjúkar hydropower plant, that started operating in 2007 (marked on the map by the large blue dot north of Vatnajökull Glacier).

Slide09The total annual Icelandic electricity generation of 17,210 GWh (17 TWh) makes Iceland one of Europe’s largest producers of renewable power.

Norway is in a strong first place with its massive hydropower capacity, generating approximately 120 TWh annually. However, the electricity price in Iceland is much lower than in Norway or other European countries. Iceland  has no electricity connections with other countries. Thus, the generating firms in Iceland do not have access to the large electricity markets in Northwestern Europe, where electricity prices tend to be much higher than in Iceland.


Despite Iceland’s isolated electricity market and sometimes severe weather conditions, the electricity supply in Iceland is renown for its reliability (see for example IMD’s and WEF’s World Competitiveness reports). This high reliability is the result of Iceland’s large reservoirs and the solid transmission system, which is operated by the Icelandic Transmission System Operator or TSO (Landsnet). The TSO connects all the large power stations to the Icelandic electrical grid, which runs around the country (all the nation lives in the lowlands, with the majority located in Southwestern Iceland).

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