Icelandic Member Committee

The Iceland National Committee aims to promote sustainable energy development in Iceland, as a part of the World Energy Council’s energy vision. As a member of the World Energy Council network, the organisation is committed to representing the Icelandic perspective within national, regional and global energy debates. The committee includes a variety of members to ensure that the diverse energy interests of Iceland are appropriately represented. Members of the committee are invited to attend high-level events, participate in energy-focused study groups, contribute to technical research and be a part of the global energy dialogue.

Born in Reykjavik 1951, Mr Johannesson finished his MSc in Engineering Physics in 1976, his PhD thesis on thermal models for buildings in 1981 and was appointed as an associate professor at Lund University in 1982. He was awarded the title of doctor honoris causae from the University of Debrecen in 2008 and the Swedish Concrete Award in 2011. From 1975 he worked as a research assistant at Lund University, from 1982 as a consultant in research and building physics in Reykjavik and from 1990 as a professor in Building Technology at KTH in Stockholm. His research has mainly concerned the thermodynamical studies of buildings, innovative building systems and energy conservation in the built environment. Since the beginning of 2008 he has been the Director General of the Icelandic National Energy Authority which is responsible for public adminstration of energy research, energy utilisation and regulation. At present he is also an affiliated professor at KTH, the chair of IPGT the international Partnership for Geothermal Technology and the leading person for Geothermal ERANET a European project for coordinating funding geothermal research and knowledge base in European countries.

Energy in Iceland

iceland, critical uncertainties, action priorities

Boreal land rich in geysers, hot springs and fumaroles, Iceland is one of the most geologically active countries in the world. It is one of the only countries that count with 100% renewable electricity: 25 % coming from geothermal energy and the rest coming from hydroelectric dams. The decision to massively use geothermal energy goes back to the 1970s and the oil shocks, on which it heavily depended until then. Despite a conversion to green energy, Iceland still needs efforts to meet international targets for reducing greenhouse gas emissions.

For this year’s Issues Monitor, the energy leaders of Iceland have identified exchange rates, IoT/ Blockchain and land use as the critical uncertainties and innovative transport, renewable energy and climate framework as the action priorities for the country. 

Exchange rate is the first critical uncertainty for Iceland’s energy leaders. This is related to the volatility of the Icelandic krona, which has appreciated about 30% since 2015. In the energy sector, this is mostly important in the area of export of consulting services and energy products, which are traded in foreign currencies, while the operational costs are in local currency. The effects are also felt around financial risk and cost of investors in Iceland.

IoT/Blockchains is the second critical uncertainty, which reflects internet of things (IoT), smart grids and blockchains. This in turn means direct and low-cost transactions, smart appliance driven by smart contracts, smart grids, supply chain tracing and labelling. Uncertainty regarding IoT/Blockchain can reflect technical and economic uncertainty elements in the global market such as regarding the bitcoin sector and how it is developing. There is uncertainty about when, and to what extent, these technologies will become effective instruments for managing business in the energy sector, but their potential is recognized. 

The third critical uncertainty is land use, which has increased dramatically in comparison to previous years, when it classified as an action priority. The change is perhaps a reflection of a stronger national debate on land conservation as an environmental issue and the possibility of new national parks in Iceland. It can also reflect sometimes unbalanced discussions on sustainable utilisation on renewable energy, where the debate focuses more on land protection, than benefits related mitigating climate change, or economic and social issues, related to concerning projects.

The first action priority is innovative transports, which are described as new modes and fuel sources including electric vehicles, hybrid and natural gas vehicles. In recent years, there has been rapid development globally in this sector, especially in electric vehicles as they have been growing in the consumer market as a result of lower prices, longer driving ranges and quality. This development will require more challenges of supply of electricity to the consumer and new infrastructure to provide supply of electricity to those vehicles, and other issues.

Renewable energies is the second action priority. Renewable energies have moved slightly from the uncertainty area into the action priority. Renewable sources are in general seen as one of the big contributors towards less CO2 in Iceland and globally, aiding climate change mitigation. This is perhaps reflecting the national debate in Iceland regarding hydro and geothermal projects, where the attention is often focused on land protection issues but less on benefits related mitigating climate change and national economic and social issues. 

The third action priority for Iceland is the climate framework. After the Paris COP21 agreement, most energy leaders acknowledge that climate issues, renewables and decentralised systems will get a major boost and will play an important role towards mitigating climate change. Renewable energy is one of the big contributors towards less CO2 in Iceland and globally, mitigating climate change, which is one of the biggest global challenges today. Climate framework has been one of the action priorities in Iceland for several years, by focusing on renewable energy development.

Economic growth has moved towards more critical uncertainty, largely due to the slower growth in the airline and tourism industry, currency fluctuation of the Icelandic krona and more uncertainty regarding wage negotiations on the labour market. Concerns regarding trade barriers have also risen which could be due to issues such as Brexit, as the UK is one of Iceland’s largest trading partners. Concerns for digitalisation have also risen from last year, which perhaps reflects that Iceland is lagging behind in utilising this technology and at the same time more demand from new technology like electric vehicles. 

The key area of critical uncertainty for energy leaders in Iceland are exchange rates, followed by IoT/ Blockchain, land use, digitalisation and trade barriers. In the area of action priorities, of Icelandic energy leaders this year have place innovative transport, renewable energies, climate framework, economic growth and electricity storage. Both in the area of uncertainty and impact, the exchange rate and financial market in Iceland is ranked riskier than in Europe and in the Globe, while it finds most similarities with African countries. 

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