Skip to main content

Hydrogen Boom or Bust

Riding from the airport to Iceland's capital, Reykjavik, gives one the sensation of having landed on the moon. Black lava rocks cover the mostly barren landscape, which is articulated by craters, hills and mountains. Other parts of the island are covered by a thin layer of green moss. American astronauts traveled here in the 1960s to practice walking the lunar surface, defining rock types and taking specimens.

I, too, have traveled here on a journey of sorts to a new world, a world that is powered not by oil, coal and other polluting fossil fuels, but one that relies primarily on renewable resources for energy and on hydrogen as an energy carrier, producing electricity with only water and heat as byproducts.

My quest has brought me to the cluttered office of Bragi Arnason, a chemistry professor at the University of Iceland whose 30-year-old plan to run his country on hydrogen energy has recently become an official objective of his government, to be achieved over the next 30 years.

“I think we could be a pilot country, giving a vision of the world to come,” Arnason says to me with a quiet conviction and deep, blue-eyed stare that reminds me of this country's hardy Viking past.

When he first proposed this hydrogen economy decades ago, many thought he was crazy. But today, “Professor Hydrogen,” as he has been nicknamed, is something of a national hero. And Iceland is now his 39,000-square-mile lab space for at long last conducting his ambitious experiment. Already, his scientific research has led to a multimillion-dollar hydrogen venture between his university, his government, other Iceland institutions and a number of major multinational corporations.

I am not alone in my expedition to ground zero of the hydrogen economy: hundreds of scientists, politicians, investors and journalists have visited over the past year to learn more about Iceland's plans. My journey is also an echo of what happened in the 18th century, when merchants and officials flocked to another North Atlantic island — Great Britain — to witness the harnessing of coal.

Today, many experts are watching Iceland closely as a “planetary laboratory” for the anticipated global energy transition from an economy based predominantly on finite fossil fuels to one fueled by virtually unlimited renewable resources and hydrogen, the most abundant element in the universe. The way this energy transition unfolds over the coming decades will be greatly influenced by choices made today. How will the hydrogen be produced? How will it be transported? How will it be stored and used?

Fifteen miles south of Iceland, an eruption in 1973 on the island of Heimaey threatened the town of Vestmannaeyjar, the country's most important fishing port.

Iceland is facing these choices right now, and in plotting its course has reached a fork in the road. It must choose between developing an interim system that produces and delivers methanol, from which hydrogen can be later extracted, or developing a full infrastructure for directly transporting and using hydrogen. Whether the country tests incremental improvements or more ambitious steps will have important economic and environmental implications, not only for Iceland but for other countries hoping to draw conclusions from its experiment.

Iceland is not undertaking this experiment in isolation. Its hydrogen strategy is tied to three major global trends. The first of these is growing concern over the future supply and price of oil — already a heavy burden on the Icelandic economy. The second is the recent revolution in bringing hydrogen-powered fuel cells — used for decades in space travel — down to earth, making Arnason's vision far more economically feasible than it was just 10 years ago. The third is the accelerating worldwide movement to combat climate change by reducing carbon emissions from fossil fuel burning, which in its current configuration places constraints on Iceland that make a hydrogen transition particularly palatable. How the island's plans proceed will both help to shape and be shaped by these broader international developments.

Straddling the mid-Atlantic continental ridge, Iceland is a geologist's dream. Providing inspiration for Jules Verne's “Journey to the Center of the Earth,” the island's volcanoes have accounted for an estimated one-third of Earth's lava output since A.D. 1500. Eruptions have featured prominently in Icelandic religion and history, at times wiping out large parts of the population. Reykjavik is the only city I know that has a museum devoted solely to volcanoes. There, one can find out the latest about the 150 volcanoes that remain active today.

Iceland's volcanic activity is accompanied by other geological processes. Earthquakes are frequent, though usually mild, which has made natives rather blase about them. Also common are volcanically heated regions of hot water and steam, most visible in the hot springs and geysers scattered across the island. In fact, the word “geyser” originated here, derived from “geysir,” and Reykjavik translates to “smoky bay.” During my visit, the well-known Geysir, which erupts higher than the United States' Old Faithful, was reemerging from years of dormancy, to the delight of Icelanders everywhere.

Hot springs and geysers are scattered across Iceland. Here, geologists explore the Reykjanes geothermal area in the southwestern area of the country.

The country first began to tap its geothermal energy for heating homes and other buildings (also called district heating) in the 1940s. Today, 90% of the country's buildings — and all of the capital's — are heated with geothermal water. Several towns in the countryside use geothermal heat to run greenhouses for horticulture, and geothermal steam is also widely harnessed for power generation. One tourist hot spot, the Blue Lagoon bathing resort, is supplied by the warm, silicate-rich excess water from the nearby Reykjanes geothermal power station. Yet it is estimated that only 1% of the country's geothermal energy potential has been utilized.

The Blue Lagoon, a bathing resort in Iceland, features natural geothermal sea water.
Falling water is another abundant energy source here. Although it was floating ice floes that inspired an early (but departing) settler to christen the island Iceland, the country's high latitude has exposed it to a series of ice ages. This icy legacy lingers today in the form of sizable glaciers, including Europe's largest, which have carved deep valleys with breathtaking waterfalls and powerful rivers.

The first stream was harnessed for hydroelectricity in the 1900s. The country aggressively expanded its hydro capacity after declaring independence from Denmark in the 1940s, beginning an era of economic growth that elevated it from Third World status to one of the world's most wealthy nations today. Hydroelectricity provides 19% of Iceland's energy — and that share could be significantly increased, as the country has harnessed only 15% of potential resources (though many regions are unlikely to be tapped, due to their natural beauty, ecological fragility and historical significance).

Iceland is unique among modern nations in having an electricity system that is already 99.9% reliant on indigenous renewable energy-geothermal and hydroelectric. The overall energy system, including transportation, is roughly 68% dependent on renewable sources. This, some experts believe, prepares the country well to make the transition from internal combustion engines to fuel cells, and from hydrocarbon to hydrogen energy. With its extensive renewable energy grid, Iceland has a head start on the rest of the world and is positioned to blaze the path to an economy free of fossil fuels.


Seth Dunn is a research associate at the Worldwatch Institute.

More on this topic