Japan eyes Iceland's geothermal success to tame soaring energy bills

Rising crude oil prices are straining household budgets in Japan, prompting interest in Iceland’s renewable energy model. In Iceland, roughly 70 % of electricity comes from hydropower and the remainder from geothermal sources, allowing pipelines to deliver hot water directly to homes and keeping utility bills low; a Japanese expatriate family paid about 21,000 yen for full-time heating and electricity in January. The island nation also boasts cheap electricity that fuels widespread electric-vehicle adoption, despite costly gasoline imports.

Japanese businessman Kenichi Noda has capitalised on these conditions, operating iFarm Iceland’s underground, climate-controlled vertical farm that grows premium Japanese strawberries for the European market, offsetting high material costs with inexpensive power. By contrast, Japan, with a population over 120 million, depends heavily on imported LNG and coal, and its geothermal capacity—though theoretically large—accounts for only 0.3 % of electricity due to regulatory, geographic and industry resistance.

Officials view geothermal as the “last frontier” of renewables, and new drilling technologies may eventually unlock more of the resource. Iceland’s experience could inform Japan’s future energy strategy.