Proprietary data
Data Center Power & Policy in Iceland
Every government action on data centers and power in Iceland that we have verified: moratoriums, grid rules, incentives, tariffs and plans, with the power indicators that drive site selection.
By Amit Jain
Reviewed by Deepti Agrawal
Updated 26 October 2026
In short
As of 26 October 2026, DC Market Insights tracks 10 government actions on data centers and power in Iceland, 7 of them in force. Iceland has 1 restriction on new data centers in force: Landsvirkjun power sales priority: general use first, crypto mining phased out, sales to data centres cut to one third of 2022. 2 incentive schemes apply, including Data centre services to foreign buyers treated as supplied abroad for VAT (Act 163/2010).
Market snapshot
Iceland power and policy: key facts
- Industrial electricity price: 42.9 USD/MWh (2022). Rank 27 of 29 tracked countries, highest first.
- Renewable share of electricity generation: 100% (2026). Rank 1 of 40 tracked countries, highest first.
- Data centers’ share of electricity demand: 3.5% (2026). Rank 4 of 5 tracked countries, highest first.
- Latest change: Action Plan measure 4: review of transmission and distribution tariff competitiveness (Ministry of the Environment, Energy and Climate, 27 May 2026).
- By type: 3 regulation, 2 power tariff, 2 incentive and 1 grid access.
Power indicators for Iceland
Latest official figure for each indicator, with earlier years where we have them.
In force now in Iceland
Restriction (1)
Landsvirkjun power sales priority: general use first, crypto mining phased out, sales to data centres cut to one third of 2022
State-owned Landsvirkjun (over 70% of Iceland's generation) said it had cut sales to data centres sharply because of the tight power system, to one third of the 2022 level, and that crypto mining is being phased out in favour of AI and high-performance computing. Its stated sales priority is: first, growth in general use and the energy transition; then the digital transition, including high-tech data centres; then development of existing large users.
Power tariff (1)
Landsnet transmission tariff for large users (stórnotendur), in USD
Large users connected directly to Landsnet's transmission grid (smelters, data centres) pay a separate USD tariff: a delivery charge of USD 71,290 per year, a capacity charge of USD 41,527 per MW per year and an energy charge of USD 2.1 per MWh. Distribution utilities pay in ISK (ISK 9,786,291 per MW-year and ISK 708.64 per MWh, tariff valid from 1 April 2026), plus system services (ISK 122.04/MWh) and losses (ISK 65.52/MWh).
2.1 USD/MWh Energy charge only; plus USD 41,527 per MW per year capacity charge and USD 71,290 per year delivery charge. Landsnet large-user calculator shows tariff valid from 1 Apr 2026 (published list: nr. 61).
Incentive (2)
Data centre services to foreign buyers treated as supplied abroad for VAT (Act 163/2010)
The same 2010 amendment to the VAT Act provides that electronically supplied services are deemed supplied where the buyer lives or has its place of business, and applies the same rule to sales by data centres of any kind of mixed services to buyers resident abroad without a fixed establishment in Iceland. In effect such sales fall outside Icelandic VAT.
VAT exemption on imported servers placed in Icelandic data centres by foreign owners (Act 163/2010)
Act No. 163/2010 amended the VAT Act No. 50/1988 to exempt from VAT the import of servers and related equipment when the owners are resident in another EEA or EFTA state or the Faroe Islands and have no fixed establishment in Iceland, the equipment is placed in a data centre they do business with and is used only by the owner. The act defines a data centre as specially equipped premises designed for information-processing equipment and related activity.
Regulation (2)
Reform of the Master Plan for Nature Protection and Energy Utilisation (rammaáætlun) and Electricity Act
Althingi passed the Minister's bill amending the act on the protection and energy utilisation plan (rammaáætlun) and the Electricity Act, described as the largest change to the framework since it began. The process becomes continuous (projects go to the minister and Althingi once evaluation is finished instead of every four years), fixed time limits are set in law for all parties, consultation rounds are reduced and municipalities get a shorter deadline for land-use decisions. New generation in Iceland must pass through this plan.
Electricity Act amendment on security of supply (Act 47/2025): households first in rationing
Act No. 47/2025 amends the Electricity Act No. 65/2003 (raforkuöryggi). It adds criteria for assessing security of supply (long-term supply, generation and transmission capacity for projected demand 2-5 years ahead, one-year generation security, real-time security). If supply cannot meet demand, the TSO rations to distribution utilities and users, with distribution utilities given priority; distribution utilities must in turn give priority to household users and critical social infrastructure. Large directly connected users such as data centres are therefore behind households in any rationing.
Plan or strategy (1)
Industrial Policy – A Growth Plan to 2035 (names data centres as a growth sector)
The Government approved an industrial policy to 2035 with an action plan for 2026-2027 of 35 measures; priorities include energy supply and infrastructure and simpler licensing. Under power-intensive industry, the policy points to strong growth potential in data centres, driven by AI demand, citing Iceland's competitive electricity and cool climate.
Announced and proposed
Measures that are not yet in force. Status changes when the rule takes effect or is withdrawn.
Action Plan measure 4: review of transmission and distribution tariff competitiveness
Measure 4 commits to a full analysis of the competitiveness of regulated electricity transmission and distribution, covering the regulatory framework, licensing, required rates of return and other drivers of tariffs, as a basis for possible changes to the regulatory framework. Lead: Ministry of the Environment, Energy and Climate with the Environment and Energy Agency and the Electricity Regulatory Authority; timeframe autumn 2026.
Action Plan measure 3: faster transmission build-out through land access and expropriation rules
Measure 3 plans law changes giving Landsnet and distribution utilities powers like telecom operators: landowners must accept infrastructure where needed against full compensation, and disputes over compensation or expropriation will no longer delay construction once the Minister has granted expropriation authority and security is posted. Lead: Ministry of the Environment, Energy and Climate; timeframe autumn 2026.
Action Plan measure 8: regulatory and tax framework for data centres (autumn 2026)
Measure 8 of the Industrial Policy Action Plan 2026-2027 aims to set a clear regulatory framework for the operation and taxation of data centres, because several issues, particularly tax, remain unclear. Lead: Ministry of Finance and Economic Affairs with the Ministry of Industries; timeframe autumn 2026; deliverable is analysis and regulatory framework development.
Timeline of data center and power policy in Iceland
| Date | Action | Type | Status | Authority |
|---|---|---|---|---|
| 27 May 2026 | Action Plan measure 4: review of transmission and distribution tariff competitiveness | Power tariff | Announced | Ministry of the Environment, Energy and Climate |
| 27 May 2026 | Action Plan measure 3: faster transmission build-out through land access and expropriation rules | Grid access | Announced | Ministry of the Environment, Energy and Climate |
| 27 May 2026 | Action Plan measure 8: regulatory and tax framework for data centres (autumn 2026) | Regulation | Announced | Ministry of Finance and Economic Affairs |
| 27 May 2026 | Industrial Policy – A Growth Plan to 2035 (names data centres as a growth sector) | Plan or strategy | In force | Government of Iceland (Prime Minister's Office) |
| 1 Apr 2026 | Landsnet transmission tariff for large users (stórnotendur), in USD | Power tariff | In force | Landsnet (TSO), within revenue caps set by the regulator |
| 19 Feb 2026 | Reform of the Master Plan for Nature Protection and Energy Utilisation (rammaáætlun) and Electricity Act | Regulation | In force | Althingi; Ministry of the Environment, Energy and Climate |
| 14 Jul 2025 | Electricity Act amendment on security of supply (Act 47/2025): households first in rationing | Regulation | In force | Althingi; Ministry of the Environment, Energy and Climate |
| 23 Dec 2024 | Landsvirkjun power sales priority: general use first, crypto mining phased out, sales to data centres cut to one third of 2022 | Restriction | In force | Landsvirkjun (state-owned generator) |
| 28 Dec 2010 | Data centre services to foreign buyers treated as supplied abroad for VAT (Act 163/2010) | Incentive | In force | Althingi; Ministry of Finance and Economic Affairs |
| 28 Dec 2010 | VAT exemption on imported servers placed in Icelandic data centres by foreign owners (Act 163/2010) | Incentive | In force | Althingi; Ministry of Finance and Economic Affairs |
How Iceland compares
Latest official figures for the countries we track.
| Country | Industrial power price | Renewable share | Grid emission factor | Restrictions in force | Incentives in force |
|---|---|---|---|---|---|
| Argentina | — | 19.6% (2025) | 0.28 kgCO2/kWh (2022) | 0 | 2 |
| Australia | — | 39% (2025) | — | 0 | 2 |
| Austria | 169 USD/MWh (2026) | 78% (2025) | 0.15 kgCO2/kWh (2023) | 0 | 0 |
| Bangladesh | — | 2% (2025) | — | 0 | 0 |
| Belgium | 183 USD/MWh (2025) | 34.3% (2025) | 0.19 kgCO2/kWh (2024) | 0 | 0 |
| Brazil | — | 86.8% (2025) | 0.07 kgCO2/kWh (2025) | 0 | 1 |
| Canada | — | 63.9% (2024) | 0.10 kgCO2/kWh (2022) | 2 | 0 |
| Chile | — | 66% (2025) | 0.24 kgCO2/kWh (2023) | 0 | 0 |
| China | — | 38% (2025) | 0.53 kgCO2/kWh (2023) | 2 | 0 |
| Colombia | — | — | 0.22 kgCO2/kWh (2024) | 0 | 2 |
| Denmark | 134 USD/MWh (2025) | 81.5% (2024) | 0.11 kgCO2/kWh (2024) | 1 | 0 |
| Ecuador | — | — | 0.16 kgCO2/kWh (2024) | 1 | 0 |
| Finland | 58.4 USD/MWh (2025) | 57% (2024) | 0.03 kgCO2/kWh (2025) | 0 | 0 |
| France | 104 USD/MWh (2025) | 27% (2025) | 0.02 kgCO2/kWh (2025) | 0 | 1 |
| Germany | 180 USD/MWh (2025) | 58.8% (2025) | 0.34 kgCO2/kWh (2025) | 1 | 0 |
| Guatemala | 84.5 USD/MWh (2025) | 53.5% (2024) | 0.29 kgCO2/kWh (2024) | 0 | 2 |
| Hong Kong | 180 USD/MWh (2026) | — | 0.59 kgCO2/kWh (2025) | 0 | 2 |
| Iceland | 42.9 USD/MWh (2022) | 100% (2026) | — | 1 | 2 |
| India | 82.1 USD/MWh (2025) | 28.7% (2026) | 0.68 kgCO2/kWh (2025) | 0 | 5 |
| Indonesia | 62.9 USD/MWh (2024) | 16.3% (2025) | 0.68 kgCO2/kWh (2024) | 0 | 1 |
| Ireland | 234 USD/MWh (2025) | 41.3% (2024) | 0.20 kgCO2/kWh (2025) | 2 | 0 |
| Italy | 184 USD/MWh (2025) | 48% (2025) | 0.20 kgCO2/kWh (2025) | 0 | 0 |
| Japan | — | 23.1% (2024) | 0.45 kgCO2/kWh (2024) | 0 | 0 |
| Kazakhstan | — | 14.6% (2025) | 0.81 kgCO2/kWh (2025) | 0 | 0 |
| Kyrgyzstan | 41.7 USD/MWh (2026) | 88% (2024) | 0.16 kgCO2/kWh (2019) | 1 | 1 |
| Luxembourg | 165 USD/MWh (2025) | 23.3% (2025) | — | 0 | 0 |
| Malaysia | 105 USD/MWh (2026) | 21% (2025) | 0.74 kgCO2/kWh (2024) | 1 | 1 |
| Mexico | — | — | 0.44 kgCO2/kWh (2023) | 0 | 0 |
| Nepal | — | — | — | 0 | 0 |
| Netherlands | 148 USD/MWh (2025) | 49% (2025) | 0.20 kgCO2/kWh (2024) | 4 | 0 |
| Pakistan | 97.5 USD/MWh (2026) | 34.7% (2025) | — | 0 | 1 |
| Panama | 66.3 USD/MWh (2025) | 74.7% (2025) | 0.15 kgCO2/kWh (2024) | 0 | 1 |
| Paraguay | 33.0 USD/MWh (2026) | — | — | 1 | 2 |
| Peru | — | 62.6% (2025) | — | 0 | 1 |
| Russia | — | 17.6% (2025) | — | 2 | 0 |
| Singapore | 189 USD/MWh (2025) | 2.1% (2024) | 0.40 kgCO2/kWh (2024) | 0 | 0 |
| South Korea | — | 9.8% (2025) | — | 0 | 0 |
| Spain | 113 USD/MWh (2025) | 55.5% (2025) | — | 0 | 0 |
| Sri Lanka | — | 60.2% (2025) | — | 0 | 0 |
| Sweden | 78.5 USD/MWh (2025) | — | 0.06 kgCO2/kWh (2023) | 0 | 0 |
| Switzerland | 240 USD/MWh (2026) | 70.8% (2025) | 0.13 kgCO2/kWh (2022) | 0 | 0 |
| United Arab Emirates | 120 USD/MWh (2026) | 8.8% (2024) | 0.47 kgCO2/kWh (2024) | 0 | 0 |
| United Kingdom | 234 USD/MWh (2026) | 52.1% (2025) | 0.15 kgCO2/kWh (2026) | 1 | 1 |
| United States | 86.2 USD/MWh (2025) | 24% (2025) | 0.35 kgCO2/kWh (2023) | 0 | 1 |
| Uruguay | 101 USD/MWh (2026) | 98% (2025) | 0.01 kgCO2/kWh (2025) | 0 | 3 |
| Uzbekistan | 83.3 USD/MWh (2026) | 19.4% (2025) | — | 1 | 0 |
| Venezuela | — | 77% (2023) | — | 0 | 1 |
Questions
Is there a data center moratorium in Iceland?
Yes. 1 restriction on new data centers is in force in Iceland: Landsvirkjun power sales priority: general use first, crypto mining phased out, sales to data centres cut to one third of 2022.
What incentives does Iceland offer data centers?
In force: Data centre services to foreign buyers treated as supplied abroad for VAT (Act 163/2010) and VAT exemption on imported servers placed in Icelandic data centres by foreign owners (Act 163/2010). Each is listed with its authority and dates on this page.
What does electricity cost for data centers in Iceland?
The industrial electricity price in Iceland was 42.9 USD/MWh in 2022 (Original unit USD/MWh, no conversion. Landsvirkjun average price to industrial customers, full year 2022 (latest full-year figure Landsvirkjun itself published; its 2023-2025 releases checked give no figure). Landsvirkjun's interim releases for 2022 state). Data center contracts can differ by voltage level, contract length and location.
How much of Iceland’s electricity is renewable?
Renewables supplied 100% of electricity generation in Iceland in 2026.
Where does this data come from?
Each action comes from a page we opened: a law, regulation, gazette notice, ministry or regulator release, grid operator notice or investment agency page, and only when official text is not available a company or trade publication. A second analyst re-opens the source before an item is published. Government sources are linked on the page; all sources come with the Excel data.
What counts as a restriction or moratorium?
A government or grid operator rule that stops, pauses, caps or conditions new data center capacity or grid connections, for a country or a region within it. Proposals are shown as proposed until they take effect.
How are power prices compared?
We use each country’s official statistics for industrial or non-household electricity, converted to US dollars per MWh at the average rate for the year where needed, and show the year and source. Contract prices for data centers can differ.
How often is it updated?
Countries are reviewed on a rolling schedule and changes are added as they are announced. Each item shows the date of the action.
Global capacity
How much data center capacity is installed worldwide?
Installed and forecast capacity in MW by region and country, 2020 to 2035, with low, base and high cases. Updated every quarter.
Choosing a market or a site?
Our analysts prepare country briefings on power, grid access, incentives and permits, with every source, in Excel.