Deregulation, Environmental and Planning Policy in the Icelandic Renewable Energy System

Iceland is in the forefront of using renewable, emission free hydro and geothermal energy resources for electricity generation and space heating. The resource exploitation is, however, quite controversial for the reason of environmental and natural protection and the public image of bulk sales to "heavy" energy intensive industries. It is proposed that the public image of the resources themselves could be enhanced through various artistic design inputs. The concept of economic rent and resource ownership is gradually being brought into focus while there are great challenges in introducing a competitive market environment in this sector. Market size in this small country and various technical and economic constraints seem to impose such challenges. It is expected that a long term alignment to international electricity markets will take place while this should enhance the value of the green resources but making the position for bulk Energy Intensive Industry (EII) customers increasingly difficult.