GEOTHERMAL ENERGY IN ICELAND: HOW THE COUNTRY TURNED HEAT FROM BENEATH THE GROUND INTO EVERYDAY LIFE
Iceland has just found another reminder of the extraordinary wealth hidden beneath the island’s surface. During a new drilling project at Áshildarmýri, workers encountered water at around 80°C (176°F) at a depth of 792 metres. During testing, the flow reached approximately 40–50 litres per second. For Iceland, this is more than an interesting geological discovery. Hot water from beneath the ground is one of the foundations of life in the country.
Kröflustöð – a power plant beneath an active volcanic massif
Construction began in 1974. The project was affected by the Krafla Fires eruptions between 1975 and 1984. Today, the plant has two 30 MW units, with a total capacity of 60 MW. It uses geothermal steam from the Krafla area.
At first glance, news like this may seem almost routine in Iceland. Hot springs, steam rising from the ground and geothermal fields are, after all, among the island’s defining symbols. But geothermal energy is not simply a natural attraction for tourists.
Iceland has transformed it into a practical energy source that heats homes, supplies towns with hot water, warms swimming pools, helps grow vegetables and, where conditions are suitable, also generates electricity.
According to Iceland’s National Energy Authority, approximately 90 percent of the energy used to heat homes comes from geothermal sources. Geothermal energy also accounts for more than 60 percent of Iceland’s primary energy consumption, as it is used not only for heating but also for electricity generation, agriculture and other purposes.
Why does Iceland have so much hot water?
The answer lies deep beneath the Icelandic landscape.
Iceland sits directly on the boundary between tectonic plates and is also located in an area of intense volcanic activity. Rainwater penetrates the rocks, comes into contact with hot underground formations and heats up deeper within the Earth’s crust. In some areas, the water can reach very high temperatures before pressure forces it back towards the surface.
Not all hot water is the same, however. Its temperature, chemical composition, quantity and depth all matter. That is why geological surveys are carried out before major drilling projects to determine where drilling is likely to be worthwhile.
That is how the new well at Áshildarmýri came about. According to a report by Icelandic public broadcaster RÚV, geologists surveyed the area beforehand, and the subsequent well reached a depth of 792 metres. The result was a source with a temperature of around 80°C and a very high flow rate.
When hot water began heating homes
Iceland, of course, has not always used geothermal energy in its modern form.
The first known use of geothermal water to heat a home dates back to 1908, when Stefán B. Jónsson at Suður-Reykir in Mosfellsbær brought hot spring water to his house. Early school projects followed, and larger-scale district heating systems began to be developed in the 1930s.
In Reykjavík, a three-kilometre-long pipe was laid in 1930, carrying water from the Þvottalaugar area to Austurbæjarskóli. It marked the beginning of a system that would gradually transform the way the entire city was heated. Reykjavík is now one of the places where dependence on geothermal heating is almost absolute. Municipal sources state that by 1971, 98 percent of homes in Reykjavík and surrounding communities were connected to geothermal heating.
The oil crises of 1973 and 1979 also provided a decisive push. Iceland intensified its search for ways to reduce dependence on imported oil, while the government supported geothermal exploration and the expansion of district heating networks.
The result can now be seen almost everywhere.
Hot water instead of a boiler room
In a country without extensive reserves of coal or oil, geothermal energy has become a natural part of the infrastructure.
Hot water from geothermal sources travels through pipes to individual towns and communities. There it can be used directly to heat buildings and produce hot tap water. In some systems, the source water is used directly; in others, heat exchangers transfer the heat to the district heating system.
Iceland’s geothermal and other heating networks are extensive. According to Orkustofnun, district heating systems supply hot water to approximately 95 percent of Iceland’s population. In addition to the major systems, there are around 200 smaller geothermal sources serving scattered communities across the country.
That is why geothermal energy is far less exotic to an ordinary Icelander than it is to a visitor.
When temperatures outside drop below freezing, there is no need to switch on a domestic gas or oil boiler. The heat arrives through pipes from beneath the ground.
And then there are the swimming pools
One of the most visible consequences of Iceland’s geothermal revolution is its public swimming pools.
Hot water is part of everyday life in Iceland. Swimming pools are not merely places for exercise or swimming, either. They are social spaces where people go to relax, meet others and spend time together.
For visitors, it can be surprising that something considered an energy-intensive luxury elsewhere – an outdoor heated pool in the middle of winter – is an ordinary part of Icelandic urban infrastructure.
And geothermal energy makes it possible.
Greenhouses in the middle of a cold country
Another application is even more surprising.
Thanks to geothermal heat, Iceland can heat greenhouses where vegetables and other crops are grown. This does not make Iceland an agricultural superpower, but geothermal energy makes food production possible in conditions where it would be considerably more difficult without an inexpensive source of heat.
Geothermal energy is also used, for example, in fish farming and various industrial processes.
And this is where Iceland’s system becomes particularly interesting: the same natural resource can be used in several different ways depending on how much heat it still contains.
Geothermal energy in Iceland: From hot water to electricity
The highest temperatures found in geothermal resources can also be used to generate electricity.
The principle is similar to that of other thermal power plants: heat from the source produces steam or heats another working fluid, which drives a turbine connected to a generator. The difference is that Iceland does not have to produce the heat by burning coal or gas. It uses heat that already exists deep within the Earth.
Geothermal electricity generation, however, is not the only pillar of Iceland’s energy system. Hydropower is even more important. According to Icelandic energy statistics, hydropower generation reached 14.2 TWh in the year measured, while geothermal power plants generated 5.9 TWh.
Iceland has therefore developed a rather unusual combination: it uses water from glaciers and rivers to generate electricity, while heat from the Earth is used primarily for heating and also for electricity generation.
Why isn't every hot spring a power plant?
It might seem that if water reaches 80°C somewhere, all you need to do is drill a well and start generating electricity.
It is not that simple.
For electricity generation, temperature is only one factor. Pressure, water volume, reservoir depth, chemical composition and the stability of the flow are also important. A source with a huge quantity of relatively warm water may be excellent for heating but not necessarily ideal for generating electricity.
That is why the discovery at Áshildarmýri is particularly interesting from the perspective of heat utilisation. The well has produced an exceptionally productive source of water at around 80°C – precisely the kind of discovery that could be important for local heating infrastructure.
Iceland’s renewable resources provide exceptionally accessible heat as well as relatively inexpensive electricity generation. But the greatest advantage for Icelanders is heating: most households do not need to buy gas, heating oil or large amounts of electricity to heat their homes.
Iceland is learning to use every degree of heat
There is something else fascinating about Icelandic geothermal energy.
Heat does not have to be used only once.
Very hot water can first be used to generate electricity. The heat remaining after that process can then be used for heating. Later, the water may be used in other applications, such as agriculture or fish farming.
This principle is known as cascaded use of geothermal energy.
It makes sense: why allow heat to escape when it can serve several different purposes?
Iceland has therefore not created just one energy product from geothermal resources. It has developed an entire system in which heat is gradually transferred from more demanding applications to those requiring lower temperatures.
It is not an energy source without challenges
Even so, it would be a mistake to portray Icelandic geothermal energy as a perfectly clean and problem-free resource.
Geothermal power plants can, for example, release carbon dioxide and methane naturally contained in geothermal steam. Icelandic utility company Orkuveita Reykjavíkur therefore uses Carbfix technology, which captures CO₂ and stores it underground in the form of stable minerals.
Excessive extraction can also become a problem. A geothermal reservoir is not infinite, and its use must be balanced against the rate at which it can naturally be replenished.
Iceland is therefore no longer simply a country searching for more hot water. Increasingly, it must also address the question of how to use that resource sustainably over the long term.
There is still plenty to discover beneath Iceland
And this brings us back to the new discovery at Áshildarmýri.
The new well shows that even after decades of intensive geothermal development, Iceland’s underground resources are far from being completely understood. At a depth of 792 metres, the drilling reached water at around 80°C with an exceptionally high flow rate. According to RÚV, the volume of water is even greater than the existing pumping equipment can currently utilise.
Something is therefore continuing to happen beneath Iceland that may be almost invisible to visitors. Beneath lava fields, meadows and roads, new heat sources are being sought, wells are being drilled hundreds of metres deep and researchers are investigating what lies within the rocks below the surface.
And when a well succeeds, the result does not have to be merely a geological curiosity.
It can provide heat for hundreds of homes.
It can supply energy for greenhouses, swimming pools or industry.
And it can become another small piece of the system that has helped transform one of Europe’s harshest inhabited regions into a country where heat from the Earth is not an exception, but part of everyday life.
About the Author
Iceland has fascinated me for many years. Over the course of numerous journeys across the island, I have driven tens of thousands of kilometers, experienced storms that changed travel plans within minutes, and witnessed days when choosing the right route meant discovering places that most visitors never see. I documented many of these experiences in my documentary film Island in the North.
Through this website, I share practical travel advice, up-to-date information, and firsthand experiences from the field to help others explore Iceland more safely and gain a deeper understanding of its unique landscapes and ever-changing nature.
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