Due to the island’s unique location and nature of formation, Iceland is the perfect country to lead the world in widespread geothermal energy use. The island is situated perfectly between the North American and Eurasian plates at a crack in the earth’s crust, and contains the two most important aspects of geothermal energy: enormous and continually renewed underground reservoirs, and shallow plumes of magma that heat the deepest sections of these reservoirs to upwards of 750 degrees Fahrenheit. On top of it all, the spreading of the seafloor below has become visible on land making Iceland one of the most geologically active countries on the planet.
Historically, Iceland has tapped into this geothermal energy as early as 1930 by straight piping hot water from the nearby springs into schools for heat. However, it wasn’t until the first oil shock of the 1970’s that truly made the country set out to make better use of this renewable and abundant energy source. By financing thermal and electric power plants throughout the country, as well as the infrastructure required to deliver hot water to homes, the Icelandic government not only eliminated the country’s dependence on fossil fuels for heating and electricity, but also jump-started an entire industry.
Geothermal energy works by tapping into water stored deep in the earth and using the steam generated from the heat of the earth’s core to power a steam turbine/generator which in turn generates electricity. The water is then pumped back down into the earth and reheated then reused.
Today, 99 percent of Iceland’s electricity is produced from renewable sources, 30 percent of which is geothermal (the rest is from hydroelectric), according to Iceland’s National Energy Authority. When transportation, heating and production of electricity are considered as a whole, geothermal provides half of all the primary energy used in Iceland. The capital, Reykjavik is home to the largest district heating system in the world, and it has been estimated that were Icelanders still dependent on oil, their heating costs would be five times as high. Across all of Iceland, 90 percent of households are connected to a district heating system, with just a few remote households getting their heat from fossil fuels such as propane.
Iceland is now the leading exporter of geothermal expertise to the rest of the world. Iceland’s third-largest bank, Glitnir, helped finance the world’s biggest geothermal district heating project in the city of Xianyang, China, and currently retains a staff of geologists to evaluate the potential of early stage drilling projects.
References:
http://iceland-times.com/section.php?id=167&id_art=184v
http://www.scientificamerican.com/article/iceland-geothermal-power/