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Thursday, 29 October 2026 Icelandic stories. Global audience.
Business & Politics

Electricity shortage for data centers as demand surges in Iceland

Iceland’s increasing demand for electricity is being driven by data centers, which now face shortages. An executive at Landsvirkjun says the sector's expansion is creating new challenges for the national grid.

Geothermal power plant with steam stacks and pipelines
Image: Gretar Ívarsson – Edited by Fir0002 / Wikimedia Commons (Public domain), original (resized) Illustrative image.

Iceland is experiencing a surge in electricity demand for data centres, which is straining the national grid, according to a report by RÚV on Monday. Most of the additional pressure on the national grid now comes from expanding data centre operations, and several new companies have shown interest in establishing themselves in the country.

Tinna Traustadóttir, an executive at Landsvirkjun, the National Power Company of Iceland, told RÚV that the country has now reached a shortage of electricity specifically for data centers. “Iceland has reached a data center electricity shortage,” she said. (translated)

Data centers are not alone in consuming much of Iceland’s energy output. Nearly 80% of all electricity produced in Iceland is used by heavy industry, while households account for about 5%.

Background

Landsvirkjun, the National Power Company of Iceland, operates most of the country’s electricity generation, including hydropower, geothermal and wind stations. Iceland is a Nordic island nation in the North Atlantic, located between Europe and North America, with a population around 395,000 and a democratically elected government.

Sources

Image: Gretar Ívarsson – Edited by Fir0002 / Wikimedia Commons (Public domain), original (resized) Illustrative image.