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Sustainable World Powered by Renewable Energy from Iceland

An interview of Hörður Arnarson, CEO of Landsvirkjun.

Mr Arnarson, most of the world seems to understand that something needs to be done regarding climate change. Perhaps fewer people have concrete ideas about solutions. In your view, what is the way to a decarbonized and climate-friendly world?

We know what must be done. In my mind the world needs to adopt a three-pronged approach. To begin with we must increase renewable energy production. Secondly, we must place importance on innovation in production, as new times demand new methods. And thirdly, we must capture carbon dioxide that inevitably is emitted and make use of it or dispose of it. As a renewable energy company, we at Landsvirkjun focus on the first part and seek ways to deliver a sustainable world powered by renewable energy to future generations through export of sustainable goods and services.

Iceland is fortunate when it comes to renewable power and heat but there is still considerable fossil fuel use in Iceland. How will you manage to decarbonize the remaining sectors in Iceland?

Everyone must join forces: governments, business and individuals. This task certainly presents a challenge, as greenhouse gases emissions are intertwined with our economic system, this is especially true when it comes to transportation, fishing and international aviation. On the other hand, few countries are in as strong a position as Iceland with all its renewable energy. We must increase the share of renewable energy and eliminate usage of petrol and oil. This goal can be realistically met for 2050, in accordance with the Icelandic government‘s declaration, and even sooner.

We must also be careful to balance the economic value and the impact on the environment and society. We have absolutely no reason to be discouraged although the task at hand is of mammoth size, but it is of course inevitable that more green energy must be harnessed if we are to meet our goals on climate issues for the years 2030 and 2040, not to mention eliminating petrol and oil in 2050. We must reach a consensus on the source of our green energy and how it is to be produced, for our wellbeing as a nation, and as a part of an international solution to climate issues.

Renewable energy seems to be at the heart of the plan to combat climate change in Europe. Where will the energy come from?

Our neighbours in the Nordic countries and on the continent have certainly made their mark in the recent years, and the progress continues. Renewable energy production on the continent is projected to rise sixfold by 2050. In Sweden, Norway and Denmark the development of wind energy continues with incredible force. In 2030 the total wind energy production in the other Nordic countries will amount to more than four times that of Iceland’s present energy production. These countries are steadfast in their contribution to the revolution which is necessary for an improved and climate healthy world that is based on green energy. Iceland’s contribution does not have to be inferior.

What benefits do you see for Iceland when it comes to reducing your dependence on fossil fuels?

It is important that Landsvirkjun as the national power company of Iceland has commenced preparations for electric fuel production. Green fuel must replace fossil fuels. Just to give an example of the potential benefits of the fuel switch, 680.000 tonnes of petrol and diesel was imported to Iceland for domestic transport in 2018. The cost of these purchases was ISK 50 billion, or the same annual amount of expenditure by the Treasury for the public universities in the country. Even worse: the use of these fossil fuels emitted 1.7 million tonnes of carbon dioxide into the atmosphere. We can completely avert these emissions and that should be our goal.

Another important aspect is energy independence. Iceland and Europe should not hesitate to aim to be self-sufficient in energy, to achieve complete energy independence. The world is rapidly entering a new reality of electric vehicles, hydrogen-powered ships and aircraft and other green transport methods, and Iceland has every opportunity to process food and fish by using our green energy. This green future calls for both energy production and the development of green industries.

Has Iceland considered battery manufacturing for electric vehicles which seems to be a trending industry in Europe?

The adoption of electric vehicles in Iceland is happening fast. We know that these and EVs around the world will need batteries. The carbon dioxide emissions that are averted by driving EVs instead of traditional petrol cars are vital for the environment, but of course it is also important that production of the batteries is green. The contribution to the environment increases as the production is more environmentally sound. Production of batteries in Iceland would unreservedly be green, simultaneously creating a new industry, new jobs, and the country would yet again reap a healthy return of its natural resources.

Are there other industries and processes where renewable energy in Iceland might contribute to the fight against climate change?

Certainly, one important industry of the future is data centres. In a world of modern and future technology the need for data centres increases daily. Iceland offers 100% green and renewable energy for data centres, in addition to needing less energy than elsewhere due to the cold climate. Vast opportunities are in selling energy for the green operations of data centres, thus receiving a healthy return from the energy resources.

I would also like to mention that we see that increased production of renewable, green energy creates numerous opportunities in food production. This largest industry in the world uses 37% of all arable land and 70% of fresh water usage. Food production has reached certain limits on a global scale and the environmental footprint of the food production system is enormous – not only when it comes to greenhouse gases, but also the impact it has on Earth‘s biota. Food production will be controlled in high technology environment in the future. Iceland can provide the ideal conditions for sustainable food production, with export in mind just as the fishing industry, as the domestic market is too small to be economically feasible.

Many countries and companies, including Landsvirkjun, seem to have the right attitude and will to do their part when it comes to climate change. Are all these goals realistic?

We at Landsvirkjun have set ambitious goals for the Company, but we know from experience that these goals are realistic. We have doubled electrical energy production from 2005, but at the same time direct emissions of greenhouse gases per energy unit has decreased by 67%, and the carbon footprint is now lower by 65%. This reduction can be traced to decreased emissions and increased soil-binding and revegetation. From the beginning of its operations in the ´60s, Landsvirkjun has supported revegetation on a large scale. We honour that role and will continue to do so for an unforeseeable future.

Finally, Iceland is a country of renewable energy, and we have every means to eliminate fossil fuels, thus contributing to a new world. Landsvirkjun, the National Power Company, intends to be in the forefront of that progress. And we must act now.


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