Iceland, especially the city of Reykjavik, is the most energy efficient country in the world. (Runner’s up for most green cities include Vancouver, Canada; Copenhagen, Denmark; Oslo, Norway and London, England.) That’s because they rely on renewable hydropower as well as geothermal plants. Not only does geothermal energy provide power, it also provides the country’s heat and hot water. The long-term goal for Reykjavik is to become fossil fuel free by 2050. They are working on that by implementing hydrogen power, including hydrogen-run busses, which have an output of pure water. Despite its small size, Iceland is a world leader in energy technology.

So how does Iceland avoid power outages more often than not? The answer lies in hydropower and geothermal energy. The choice to generate this green, but often expensive, type of power does not come without challenges. The transmission system operator needs to maintain a grid that can balance the needs of 330,000 citizens in the capital city with a demanding manufacturing sector. It also has to move the electricity great distances in between the two areas.

To help better manage such unique electrical demands, advanced software is leading the way. Along with controls and an analytics system, the software makes sure power supply fluctuations won’t cause low inertia. This concept might sound like no big deal, but think of it this way. When an electrical system has low inertia, one component slowing down can affect the output of the entire system. However, when a grid runs with high inertia, a lot more has to go wrong to slow it down.

Generators power the grid and move energy constantly, creating a continuous frequency. A large load can disconnect from the grid and the frequency stays nearly the same. The software they use has to act quickly on Iceland’s low inertia systems to restore the same frequency after a power change.


This new software is especially critical for the aluminum smelting industry, which relies on uninterrupted power. Additionally, the same company deployed Wide Area Monitoring Software. This program gathers, analyzes, and predicts real-time electrical grid data. It can minimize disruption and its effects to restore normal power levels faster. In fact, power can be rebalanced in as little as half a second. This technology is being explored in other European countries such as Spain, Portugal, and Denmark.

Iceland pioneered the use of geothermal energy and has increased its use significantly in the last 10 years. Currently, geothermal power generates 25% of the country’s electricity production. The country’s focus on renewable energy greatly improved the economy—it directly and indirectly created more jobs. It also better serves other industries who have cut costs by using that type of power. Despite these changes, geothermal energy is still in its infancy. Engineers are working continually to improve and expand the use of this technology. Abundant rivers and lakes provide an easy way to create power while avoiding the use of coal. 

So what’s next on the agenda? Possible underwater transmission cables from Iceland to the U.K. to send them extra power. Speaking of other countries, there are unique power outage causes around the world. At Generac, we explore what those are.