You would have to look hard to find content about Iceland that does not mention the country's sustainable and renewable energy. It's all true. In many ways, Iceland won the sustainable energy lottery. However, this is not to say the country is exceptional. Many countries have the potential to implement more sustainable energy. The most challenging aspect is often to make the change, and this is where Iceland can serve as a role model.
We admit it certainly helps when hot water is bubbling to the surface, and large glacial rivers are suitable for hydroelectric energy.
For most of Iceland's history, people lived in cold, damp turf houses. Trees were very scarce, and no fossil fuels could be found. For most people, space heating was primarily from body heat! Some domestic peat was used for heating; later, imported coal and oil were added to the heating mix. Only the most wealthy could afford coal and oil as we transitioned to wooden and concrete houses. As we became acutely aware, transporting fossil fuels was costly and sensitive to tremendous price fluctuations. Events such as World Wars and political events, over which we had no influence, dramatically impacted us economically. The 1970s global oil crisis was the perfect impetus to look at our own "domestic" energy and how to make the most of it.
Early in the 20th century, Icelanders built small hydroelectric dams and pipelines to capture geothermal water for home heating. In the 1920s, both Reykjavik and Akureyri established public utility companies building hydroelectric plants close to these cities to supply power to expanding populations. However, it was only in the mid-20th century that large-scale projects came online. In the 1960s, Iceland began to attract power-intensive industries and launched plans to construct large hydroelectric projects. In 1965, the publicly-owned National Power Company, Landsvirkjun, was established, and its first project was the construction and operation of the Búrfell Hydropower Station on the Þjórsá river. Within a few decades, Iceland became a substantial exporter of raw aluminum with an extensive network of hydro dams generating electricity for industrial and domestic needs.
Dotted around Reykjavik in the 1930s were small geothermal wells that provided heat to individual buildings. The hot water was easy to reach but not hot by today's standards. Using old mining equipment, deeper wells were bored to reach hotter water for further distribution. By the late 1970s, most homes in Reykjavik were geothermally heated. Today, nine out of ten homes are heated with geothermal water in Iceland. The initial expense of such an extensive infrastructure was tremendously expensive. However, the long-term financial and social benefits of a constant, reliable, and environmentally friendly heat source are enormous.