Iceland is a global leader in harnessing geothermal resources, a feat made possible by its unique and active geology. This deep reliance on subterranean heat has shaped the nation’s infrastructure and energy policy for decades. To understand the scale of this achievement, it is necessary to examine the specific facilities, the geological advantages, and the resulting contribution of geothermal power to the national energy system.
Total Geothermal Facilities and Their Primary Functions
Iceland operates a small number of large-scale facilities for electricity generation, alongside a vast network of smaller plants focused on direct heat use. Six major power stations produce the bulk of the country’s geothermal electricity, with a total installed capacity of approximately 755 megawatts (MW). These facilities are typically combined heat and power plants, generating both electricity and hot water for district heating systems.
The direct-use heat infrastructure is far more extensive than the power generation sector suggests. The total number of smaller, localized geothermal heat sources is estimated to be around 200 across the country. These numerous systems are dedicated primarily to delivering hot water for the widespread district heating networks, which service the vast majority of Icelandic homes.
The Unique Geological Setting of Iceland
The country’s exceptional capacity for geothermal energy is due to its position astride a major tectonic boundary. Iceland is where the Mid-Atlantic Ridge, a divergent plate boundary, rises above sea level, splitting the island between the North American and Eurasian tectonic plates. This separation creates intense volcanic and seismic activity, bringing the Earth’s internal heat much closer to the surface.
This geological environment creates two distinct resource types. High-temperature geothermal areas, where temperatures exceed 200°C at a depth of 1,000 meters, are found along the active volcanic zones and are primarily used for generating electricity. These zones contain steam and superheated water that efficiently drive power turbines.
Low-temperature geothermal areas, where water is cooler than 150°C, are scattered more widely. This lower-grade heat resource is not hot enough to efficiently generate electricity but is perfect for direct applications. These applications include supplying the extensive public district heating systems, maximizing the utility of Iceland’s natural thermal endowment.
Major Named Power Stations
The largest of Iceland’s geothermal facilities is the Hellisheiði Power Plant, situated in the Hengill volcanic area near the capital region. It generates 303 MW of electrical power and approximately 400 MW of thermal energy for hot water distribution. This combined heat and power facility is a flash steam plant, drawing superheated fluid from the ground to spin its turbines.
Another significant installation in the Hengill region is the Nesjavellir Power Plant, which provides 120 MW of electrical capacity. Nesjavellir supplies a substantial portion of the hot water required for the Reykjavík district heating network. On the Reykjanes Peninsula, the Svartsengi Power Plant provides thermal energy to the nearby Blue Lagoon spa complex in addition to generating 75 MW of electricity.
Further north, the Krafla Power Plant was one of the first major stations, located near the Krafla volcano. Although smaller at 60 MW, its construction was challenged by volcanic activity in the 1970s and 1980s. The newer Theistareykir Power Plant, with 90 MW of electrical capacity, is another significant contributor to the grid in the north-east.
Geothermal Power in Iceland’s Energy Mix
Geothermal power contributes significantly to Iceland’s energy landscape, though its role differs between electricity generation and heating. Geothermal energy accounts for approximately 28 to 30% of the total electricity supply, with the remaining electrical power generated by hydropower stations.
The impact of geothermal energy is most profoundly felt in the heating sector, its primary direct application. Geothermal sources provide heat for about 90% of all residential and commercial buildings through extensive district heating systems. This widespread use means geothermal energy accounts for over 54% of Iceland’s total primary energy consumption.
A substantial portion of the generated energy is directed toward energy-intensive industries. Low-cost, consistent electricity attracts industries like aluminum smelting, which consume the majority of the nation’s electrical output. Beyond powering industry, hot water is also channeled for use in greenhouses and fish farming operations.