Japan draws lessons from Iceland, a renewable energy powerhouse

Japan is grappling with the high costs of crude oil, which are driving up energy expenses. In contrast, Iceland, known for its volcanoes and high living costs, has effectively harnessed its geothermal resources, resulting in lower utility bills. The capital, Reykjavik, boasts pipelines delivering geothermal hot water directly to households, with nearly all of the country's electricity generated from hydropower and geothermal energy.

Renewable energy accounts for about 85% of Iceland's energy consumption, excluding transportation. This low-cost energy model is proving beneficial for residents like Megumi Nishida, who sees it as a relief on their household budget. Iceland's affordability becomes even more apparent when compared to Japan's high utility costs, which can range from 30,000 to 40,000 yen per month.

Electric vehicles are prevalent in Reykjavik, and charging stations are abundant due to the cheap electricity. One Japanese entrepreneur, Kenichi Noda, is leveraging Iceland's low energy costs for his agriculture business, operating an underground vertical farm that supplies premium Japanese strawberries to Europe. Iceland's smaller population of 380,000 allows it to meet most of its electricity and heating needs with its abundant natural resources.

However, Japan, with over 120 million people, faces significant challenges in this regard due to its heavy reliance on liquefied natural gas imports and coal, as well as geographic, regulatory, and industrial barriers. Despite these obstacles, Japan has vast geothermal resources and is exploring new technologies to overcome the challenges and potentially learn from Iceland's successful model.