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Geothermal Diversity

Geothermal energy provides over half of Iceland’s primary energy supply. The principal use of geothermal energy is space heating, since close to 90% of all energy used for house heating comes from geothermal resources (low-temperature).

Geothermal energy also plays an important role in fulfilling an increasing electricity demand. Other sectors utilizing geothermal energy directly include swimming pools, snow and ice management, greenhouses, fish farming, and industrial uses.

Many of the geothermal district-heating services have been in operation for several decades. The Reykjavík geothermal district heating service started operating on a small scale in 1930 and now it is the world’s largest such service. It serves Reykjavík and adjacent communities, close to 60% of the total population of Iceland. This utilization of Iceland’s geothermal energy has a long and successful history of sustainable management of the geothermal resources.


The use of geothermal energy for industrial uses began on a large scale in 1967, with the establishment of a diatomic plant at Lake Mývatn in northeast Iceland. The plant was located near the Námafjall high-temperature geothermal field and has operated successfully for decades.

Another example of industrial use of geothermal energy in Iceland is the industrial seaweed processing plant at Reykhólar in northwest Iceland. The plant uses geothermal water for drying. Geothermal energy in Iceland has also been used for drying of hardwood, drying of fish at several locations and production of cements blocks.

The most recent industrial operation in Iceland utilizing geothermal energy is the methanol production of Carbon Recycling International in southwestern Iceland. The plant captures carbon dioxide from a geothermal power plant and converts the carbon dioxide into methanol.


Geothermal heating of greenhouses started in Iceland in 1924. Prior to that, naturally warm soil had been used to grow potatoes and other vegetables.

Most of the geothermal greenhouses are used for growing vegetables (such as tomatoes, cucumbers, and paprika) and flowers (roses, potted plants etc.). for the domestic market. Typically, the greenhouses are glass covered with heating installations, but artificial lighting has increased considerably in the last years, allowing year-round production.


There are numerous fish farms in Iceland that use geothermal energy to heat fresh water. Geothermal water, commonly 20-50°C, is used to heat water from about 5°C to 12°C in heat exchangers.

This is an industry that is likely to grow quite fast in the coming years, not least if food prices will continue being high. Salmon is the main species in the Icelandic fish-farming industry but arctic char and trout are also raised.


Iceland produces a substantial share of its electricity by harnessing geothermal resources. Geothermal plants now account for approximately one-quarter of all electricity generated and consumed in Iceland.

Several European countries are looking towards utilizing geothermal heat, not least as a source for electricity production. This for example applies both to Germany and Britain. However, these countries do not share Iceland’s geophysical conditions – low-cost geothermal electricity is not an option unless you have access to very high temperatures. On the other hand it may be an excellent option for European countries to harness their low geothermal heat for central heating.

This is an area of expertise where Iceland has great strength. Iceland has a long tradition harnessing low geothermal heat for central district heating, which explains why geothermal is such a large share of the primary energy use in Iceland.

Some of Iceland’s leading engineering firms have been exporting this know-how to countries on the European continent. The companies provided engineering, procurement, and construction management of a geothermal district heating plants. These types of plants are replacing fossil-fuel powered district heating systems with environmentally-friendly and sustainable geothermal energy.

This type of geothermal harnessing is an option that could be appealing for many communities in numerous countries in Europe. This for example applies to Germany, France, Hungary, Slovenia and several other countries. In a nutshell, domestic geothermal energy is a resource Europeans should consider very seriously for district heating.

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