Our directory of things of interest

University Directory

A heated debate

  • Written by  Daniel Allen
  • Published in Energy
Pipes carrying naturally superheated water run toward Hellisheidi Power Station Pipes carrying naturally superheated water run toward Hellisheidi Power Station Daniel Allen
01 Oct
Iceland has long been famous for its spectacular volcanism, but recent developments in the country’s geothermal power industry have generated a new mid-Atlantic rift

In the midst of a raging blizzard, the superheated mudpots of Hverir spit and bubble with relentless energy. The snow-laden air is filled with the sulphurous stench of rotten eggs, while the lifeless ground boasts a garish array of mineral salts. As Iceland’s otherworldly landscapes go, this geothermal hotspot in the country’s northeast is one of the strangest and most primeval.

It was around 24 million years ago that Iceland first rose from the ocean as a collection of volcanoes spewing lava and gas. Perched atop the rift between the divergent North American and Eurasian tectonic plates, this north Atlantic island of fire and ice is still shaped by hugely powerful subterranean forces. Eruptions, earthquakes, mud pools, fumaroles and spouting geysers are all part of daily Icelandic life.

Given the vast amounts of energy flowing just below the ground, it’s little wonder that Iceland is now pushing the boundaries of geothermal technology and resource use. While naturally hot water has long been harnessed by Iceland’s inhabitants, it wasn’t until the oil and gas price hikes of the 1970s that the island began to use it to produce electricity. Four decades later, geothermal resources now generate a quarter of Iceland’s electrical power (the rest coming from hydropower), as well as meeting the heating and hot water needs of almost every building in the country.

On the face of it, Iceland appears to be sitting pretty with regard to renewable energy supplies. However, the country’s geothermal resources aren’t quite as clean, green or limitless as you might imagine. As geothermal technology continues to develop and Icelandic companies look to further tap the country’s tectonic maelstrom, a growing number of Icelanders are viewing geothermal energy with a jaundiced eye.



Iceland’s abundant geothermal resources are a result of its unique geology and geography. Sitting above a shallow plume of molten material, the island is home to around 130 extremely active volcanoes that have been responsible for a third of the total global lava output over the past 500 years.

With so much magma lying close to the surface, Iceland’s geothermal gradient is unusually high. While the Earth’s average gradient is around 35°C per kilometre, in some parts of Iceland it can exceed 200°C per kilometre. This means that huge subterranean reservoirs of water – continually refilled by high levels of precipitation – are heated to more than 400°C. It’s this energy that’s tapped to generate electricity and to provide heat for commercial and residential building.

Iceland’s geothermal areas are divided into high- and low-temperature reservoirs. With temperatures of at least 150°C at a depth of one kilometre, high-temperature reservoirs are only found close to the plate boundary, which runs from the southwest to the northeast of the island.

Most of these reservoirs are laden with concentrated gases and minerals, rendering them unsuitable for heating and bathing. However, the steam and superheated water they contain can be brought to the surface and used to drive the turbines of electrical generators.

Iceland currently has five major geothermal power plants with a combined installed capacity of about 575 megawatts. The largest of these (indeed, the world’s largest) is at Hellisheidi, in the southwest. Operated by the publicly-owned Reykjavik Energy, it started electricity generation in 2006 and today lies at the heart of a complex debate over Iceland’s geothermal future.



Although Hellisheidi had a capacity of 303 MW when construction was completed in 2011, its electricity generating capacity is already declining. By last year, it had dropped to 276 MW, and scientists estimate that will continue to fall at a rate of 6 MW per year unless further boreholes are drilled.

‘Hellisheidi was built in a reckless way,’ says Árni Finnsson, chairman of the Iceland Nature Conservation Association. ‘The period leading up to the financial crisis in 2008 was one of great hubris for Iceland’s geothermal industry. Plants that came online were over-committed to providing electricity to aluminium smelters – they over-exploited the geothermal resources on hand and now they’re paying the price.’

The Hellisheidi situation neatly illustrates what can happen when too much energy is removed from a geothermal system. ‘The long-term commercial viability of geothermal power generation depends on the ability to extract heat in a thermally sustainable manner,’ Finnsson explains. ‘Studies have shown that the overuse of geothermal resources degrades reservoirs permanently, or for significant lengths of time. This is what has happened at Hellisheidi.’

Reykjavik Energy contends that the decrease in output was, in fact, predictable. ‘Drawdown at the Hellisheidi site has been as expected and within official permits,’ says the company’s head of communications, Eiríkur Hjálmarsson. ‘The productive area proved narrower than modelling had previously shown. To pursue sustainable operations, more steam will now be gathered farther away from the plant, from very promising boreholes drilled in 2008 and 2009.’

However, not everyone is convinced that this is the way forward. ‘Compared to the geological time scale of oil regeneration, geothermal energy is relatively renewable,’ says Miriam Rose, a geologist at Reykjavik-based NGO Saving Iceland. ‘But geothermal energy can’t truly be called a renewable energy source and boreholes need to be decommissioned after a few decades. Using geothermal energy to power large-scale industry, such as aluminium smelters that require hundreds of megawatts of energy, is certainly not sustainable or renewable.’

‘There is an ongoing debate about just how sustainable Iceland’s geothermal resources are,’ adds Ketill Sigurjonsson, managing partner of Icelandic energy consultants Askja Energy Partners. ‘If Reykjavik Energy can’t find a way to keep the power output stable, then it may create difficulties for the company. It will also strengthen criticism of Iceland’s geothermal power sector.’

Emission rates at geothermal plants are much less than those using coal or natural gasEmission rates at geothermal plants are much less than those using coal or natural gas


While Iceland’s oldest smelter started production more than four decades ago, the country’s aluminium industry never accounted for more than three per cent of its GDP until 2000. The situation changed when the Icelandic government began courting metals companies and approved construction of two further smelters.

By 2008, Iceland’s three plants were producing 870,000 tonnes of aluminium a year, virtually all of it destined for overseas markets. That year, aluminium exports eclipsed fisheries exports in value for the first time in the island’s history.

These three smelters consume about three quarters of all electricity now generated in Iceland. They have negotiated long-term contracts that pose a risk to the geothermal energy industry as the price of electricity is linked to the global aluminium price, which is currently very low. While Landsvirkjun, Iceland’s national power company, is now trying to minimise the risk with new, unlinked contracts, progress is slow.

Measures are also being taken to reduce Iceland’s dependence on aluminium, with the Icelandic government trying to attract other large-scale end users of electrical power, such as silicon-processing plants and data centres. In March, Landsvirkjun announced that it had signed an agreement to supply 35 MW of power to a new silicon production plant being constructed in Helguvik, on Iceland’s southwest coast.

‘The Icelandic government and geothermal energy companies are now pushing again for the exploitation of Iceland’s geothermal resources to serve industry,’ says Rose. ‘However, there’s increasing evidence that their estimates of available energy are overstated, and there are serious pollution considerations. A lot of Icelanders are very concerned about this, especially as geothermal fields are one of the island’s main tourist attractions.’



Geothermal resources may be renewable if used sustainably, but they aren’t emissions free, as anyone who walks the streets of Reykjavik can testify. Emissions rates associated with geothermal power plants are certainly much lower than emissions from coal or natural gas-fired power plants. According to the US Environmental Protection Agency, geothermal plants emit around five per cent of the carbon dioxide, one per cent of the sulphur dioxide, and less than one per cent of the nitrous oxide that’s emitted by a coal-fired plant of equal size.

Reykjavik Energy’s Hellisheidi and Nesjavellir geothermal plants currently emit around 62,000 tonnes of CO2 and 28,000 tonnes of hydrogen sulphide (H2S) annually. A recent study linked Hellisheidi’s H2S emissions with the increased incidence of asthma among the residents of greater Reykjavik, and strict new regulations established by the Icelandic government in 2010, have forced the geothermal industry to slash H2S emissions from its plants or face closure.

At Hellisheidi, Reykjavik Energy is currently trialling its so-called ‘CarbFix’ and ‘Sulfix’ projects, which involve extracting CO2 and H2S from geothermal steam and pumping it underground. ‘The regulatory limits for atmospheric H2S in Iceland is 50 micrograms per cubic metre, one third of the World Health Organisation recommendation,’ says Hjálmarsson. ‘Experiments with Carbon Capture and Storage at Hellisheidi have led us to sequester H2S in the same way as CO2. Reykjavik Energy regards H2S as the largest environmental issue facing the company and is acting accordingly. We will know how successful the Sulfix project has been in about a year.’

Surplus mineral rich water from the Svartsengi Geothermal Power Plant is used at the popular Blue Lagoon bathing resortSurplus mineral rich water from the Svartsengi Geothermal Power Plant is used at the popular Blue Lagoon bathing resort

Perhaps the biggest shake-up in the Icelandic geothermal industry will take place if ‘IceLink’ – a 1,000 kilometre undersea power cable linking the island with the UK – gets the go-ahead. Still in the conceptual stage, it would be the longest undersea cable in the world, costing around US$6.6 billion and taking four years to build.

The UK is already working with countries including France, Germany, Norway and Sweden to negotiate the North Sea Countries Offshore Grid Initiative, a network of underwater cables that would connect offshore wind farms and other power sources to nearby countries. However, undersea cables are very expensive and often difficult to raise funding for.

If built, IceLink would allow Icelandic companies such as Reykjavik Energy to sell electricity, at premium prices, to the UK and across Europe. It would also allow Iceland to import electricity from the European grid at times when it was cheap, and give domestic companies more leverage to negotiate better prices for their electricity in deals with Iceland-based end users, such as the aluminium smelters and data centres.

‘I’m pretty positive that this project will happen and that a decision will be made within two to three years,’ says Gunnar Ingi Gunnarsson, senior marketing manager at Icelandic consultancy Verkis. ‘The chief benefit for Iceland would be greater competition for the country’s electricity.’

‘I think that this is Iceland’s most interesting option for increasing foreign currency revenues and making the Icelandic energy sector more profitable,’ adds Sigurjonsson. ‘If it is technically possible to lay the cable, there are great options to make this deal very positive for Iceland.’



The IceLink cable would be capable of carrying up to one gigawatt of power – nearly twice the amount currently produced from Iceland’s geothermal sources – so its installation would almost certainly see the construction of more power plants in Iceland, including geothermal. However, many Icelanders oppose the idea of exporting electricity. ‘The potential short-term economic benefits from selling off all of Iceland’s geothermal and hydro energy potential will quickly be replaced by long-term costs to the environment and the taxpayer,’ says Rose. ‘Geothermal energy technology is still very new and little is known about its effects on the environment. Experimenting with such an undeveloped technology in Iceland’s geothermal areas could result in the total destruction of these beautiful and unique places. All this for a few years of energy production, reaping little reward for the Icelandic people. Is it really worth it?’

Unsurprisingly, those within the Icelandic power industry take a different view. ‘We are all citizens of the world,’ says Bjorgvin Sigurdsson, executive vice president of Landsvirkjun. ‘We must wonder what is the most effective way of generating the energy that the world demands. This is how we approach our power plant projects. We believe that the options available to us are better than the global alternatives.’

Finnsson believes that this argument is specious. ‘Harnessing all of Iceland’s geothermal energy is going to make no difference to climate change,’ he says. ‘Maybe the electricity generated would be enough to power a city like Hamburg. So claiming that Iceland’s geothermal resources can somehow save the planet is simply hot air. Recent developments are all about money.’


This story was published in the October 2014 edition of Geographical Magazine

Related items

Julysub 2020

geo line break v3

Free eBooks - Geographical Newsletter

geo line break v3

geo line break v3

University of Winchester

geo line break v3


Aberystwyth University University of Greenwich The University of Derby




Travel the Unknown

NEVER MISS A STORY - Follow Geographical on Social

Want to stay up to date with breaking Geographical stories? Join the thousands following us on Twitter, Facebook and Instagram and stay informed about the world.