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Today, energy development is ongoing, but there is Master Plan that began in 1997 to assess all the potential geothermal and hydroelectric resources. The Master Plan will be discussed more in the Policy Infrastructure section. Economic Development and Energy Intensive Industry In 1901, the per capita national economic output of Iceland is equivalent to that of present day Ghana. In just over 100 years, Iceland has become one of the most affluent countries in the world, surpassing Denmark and Sweden. Between 1901 and 2006, the per capita GDP increased 15 fold at a rate of 2.6%12. This was made possible because of the development of geothermal and hydroelectric energy. Iceland was able to reduce its demand of fossil fuels by installing reliable, cheap and renewable energy, which allowed for the change from primarily a fishing based economy to a more diversified economy. One of the ways that Iceland has been able to diversify their economy is to attract EII’s. In 2008, EII’s used around 90% of all electricity produced in Iceland (Orkustofnun). The largest EII in Iceland is the aluminum smelting industry. Figure 5 below describes the energy consumption by sector. Figure 5. Electrical consumption by sector in Iceland in 2010. Source: The first smelter came online in 1969 in Straumsvik. This smelter produced 33,000 tons/year. Today, the aluminum smelting capacity is near 800,000 tons/year and if all of the current developments are completed on time, production could reach 1,265,000 tons/year by 2015. The global forecast for 12 Gylfason, 2006 13PDF Image | Geothermal and Hydroelectric Energy in Iceland and Alaska
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