Iceland’s use of geothermal energy for generating heat and electricity.


Iceland is a pioneer in the use of geothermal energy for space heating. Generating electricity with geothermal energy has increased significantly in recent years. Geothermal power facilities currently generate 25% of the country’s total electricity production.

Direct Use of Geothermal Resources

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Iceland is well known to be a world leader in the use of geothermal district heating. After the second World War, Orkustofnun carried out research and development, which has led to the use of geothermal resources for heating of households. Today, about 9/10 households are heated with geothermal energy.

Space heating is the largest component in the direct use of geothermal energy in Iceland. The figure here on the right gives a breakdown of the utilization of geothermal energy for 2013. In the year 2013, the total use of geothermal energy was 46,7 PJ, with space heating accounting for 45%.

Heat Pumps

Until recently, geothermal energy has been economically feasible only in areas where thermal water or steam is found at depths less than 3 km in restricted volumes, analogous to oil in commercial oil reservoirs. The use of ground source heat pumps has changed the economic norms. In this case, the earth is the heat source for the heating and/or the heat sink for cooling, depending on the season. This has made it possible for people in all countries to use the earth’s heat for heating and/or cooling. It should be stressed that heat pumps can be used basically anywhere. The significant fluctuations of oil prices caused by political unrest in key oil producing regions should encourage governments to focus on indigenous energy sources to meet their basic energy requirements. Developments in the deregulation of the electricity markets and integration of the electricity networks in Europe have destabilised consumer electricity prices. This makes ground source heat pumps a favourable alternative for base load heat sources in countries where electric heating is common.

Heat pumps have not found much use in Iceland, since sufficient cheap geothermal water for space heating is commonly available. Subsidies of electrical and oil heating have also led to reluctance to invest in heat pumps. However a recent legislation has been set that allows users of subsidized electrical heating to get a contribution to improve or convert their heating system. The contribution corresponds to subsidies over 8 years. It is thus considered likely that heat pumps will become competitive in those areas of the country where water with temperature above 50°C is not found. In these places, heat pumps can be used to replace or reduce the use of direct electrical heating.

Electricity Generation

Generation of Electricity using geothermal energy 

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Generating electricity with geothermal energy has increased significantly in recent years. As a result of a rapid expansion in Iceland’s energy intensive industry, the demand for electricity has increased considerably.

The figure on the right shows the development from 1970-2013. The installed generation capacity of geothermal power plants  totaled  665 MWe in 2013 and the production was 5.245 GWh, or 29% of the country’s total electricity production.

Electricity consumption

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The figure here on the right shows how the aluminum industry in Iceland used up to 70% of produced electricity in the year 2013.



"Geothermal energy in Iceland." Iceland on the Web. N.p., n.d. Web. 29 Feb. 2016.
"Geothermal." Orcustofnun. N.p., n.d. Web. 29 Feb. 2016.
"Geothermal power in Iceland." Iceland. N.p., n.d. Web. 29 Feb. 2016.




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