Geothermal Power in the Country of 100% Renewable Energy, Iceland

December 20, 2022

The power supply in Iceland consists of a whopping 100 % renewable energy, with 70% of hydro power and 30% geothermal power. This was not something they succeeded in overnight – the government and the people have been working hand in hand to make this a reality ever since the oil shock back in the 1970’s. Japan have had its specific obstacles that have been delaying the development of geothermal power, there are still many things we can learn from Iceland.

The Land of Ice and Fire – Iceland

Iceland is an island country located close to the North Pole. The country has an area of around 103,000 km2 and is home to around 370,000 people. Its capital Reykjavik got its name from European settlers in the 8th century, who mistook the steam from geothermal activity as smoke from fire, and thus named the city “Reykjavik” - “Bay of Smoke”.

So why does Iceland have so much geothermal activity in the first place? Iceland is located on the Mid-Atlantic Ridge, on the border between the North American Plate and the Eurasian Plate. This phenomenon of a country where you can see the border between the plates on the land is very rare, even at a global level. As a result, Iceland is home to over 200 volcanoes, and 12 % of its land is covered by glaciers.

The History of Geothermal Energy Usage

Since long ago, the people of Iceland have used geothermal energy in many different areas such as for laundry, bathing, and cooking. In the 1930’s they started using geothermal hot water in factories, which also made it possible to heat up houses and schools through the water travelling through the pipeline. As of now, households’ heaters are 90% covered by geothermal heat.

The Development of Geothermal Power

Just like Japan, Iceland does not have any fossil resources. And so in the past, they used to import fossil fuels to the point where half of the energy used for heating came from oil. As a result, the 1973 oil crisis hit Iceland very hard. Having this wake-up call, the government turned their attention to domestic energy production, and decided to develop geothermal power.

It can be likened to the way the 2011 East Japan Earthquake started a movement towards geothermal and other renewable energy sources in Japan.

The Icelandic government provided companies with surveys of geothermal potential, financial support for drilling, as well as risk compensation. Due to these efforts, Iceland has now achieved 100 % renewable energy consumption, with 30 % of the energy coming from geothermal power.

As the power generation cost is cheap, aluminum smelting – which requires a lot of electricity – has become the major industry.

The hydrothermal water used in the geothermal power plants are transported to the cities through a pipeline buried in the ground, and is later used to prevent road icing, to grow vegetables in greenhouses as well as for hot water pools like “Blue Lagoon”. Nothing goes to waste!

Large Scale Geothermal Power Plants

Geothermal power was first introduced in Iceland in 1969, only a few years after the first Japanese geothermal power plant started operating in Iwate Prefecture in 1966. In the beginning, Icelandic geothermal power was mainly used for heating up the households, so most of the wells were drilled just outside of the cities.

However, this turned out to have a negative impact on the groundwater, and so in order to use geothermal power more sustainably, they started drilling wells in less densely populated areas instead. The power plant we visited this time - Hellisheiðarvirkjun, located 20 km outside of Reykjavik – is one of them. Operated by a daughter company of Reykjavík Energy since 2006, Hellisheiðarvirkjun has a capacity of 303mW (400mW for heat supply). This does not only make it the biggest geothermal power plant in Iceland, but also one of the 10 biggest geothermal power plants in the world. The electricity generated mainly goes to aluminum smelting plants, and the hydrothermal water used provides heat for both households and offices. The provision of hydrothermal water has been a basis in the geothermal development in Iceland, which has later evolved into generating electricity as well. The big difference between Japan and Iceland is that Iceland has no hot spring communities like Japan, and thus does not need to accommodate to the hot spring owners – something that has proved to be a hindrance to the geothermal development in Japan.

Iceland has come this far through 100 years of history of using geothermal energy, with the oil shock solidifying the government and the people to further develop geothermal energy. In comparison, Japan - with the 3rd biggest geothermal potential in the world – has been using geothermal energy for hot springs for hundreds of years. However, small land and high density in population as well as the need for agreement from hot spring owners are the challenges Japan still are facing.

If the government and the public will come together to work for the development and technological advancement. Also, they can develop small to medium-sized binary power plants that can exist in harmony with the hot springs instead of large-scale power plants. In this meaning, we have many things to learn from Iceland.

Baseload Power has two plants in operation and a third one on the way. We also have several land leases secured in the Flúðir and Ölfus municipalities, where we are actively are looking for new opportunities.


Construction at Kópsvatn, our first pilot power plant, started in the spring of 2018 and had an installed capacity of 600kW. Construction was completed during the autumn of the same year, and we immediately started selling to the grid. The borehole in Kópsvatn extracts geothermal water at 117°C by using an electrical submersible pump. Expansion occurred in the spring 2021, doubling the installed capacity to 1,200 kW. After having extracted the heat for power production, Kópsvatn supplies 85°C geothermal water to the district heating network in the Flúðir municipality, used in heating of homes, greenhouses, bathing and more. 

Take a tour of our geothermal power plant in Flúðir, Iceland!


Reykholt is our second power plant commissioned in 2021 with an installed capacity of 300 kW. The self-flowing borehole in Reykholt extracts geothermal water at 127°C. After having extracted the heat for power production, Reykholt supplies 80°C geothermal water to the a nearby hotel, homes, and farms.


The ER-23 borehole at Efri-Reykir was drilled in 1988 and reached 147 °C geothermal water, serving nearby farms and few hundred summer cottages with geothermal central heating since then. In July 2022 we drilled a new well, ER-24, to increase production and utilize the heat for electricity generation and additional hot water for central heating. The results from drilling and flow testing are expected to be completed by Q1 2023.

At Baseload Power we are committed to expanding the use of binary-cycle geothermal power generation and contributing to independent local communities, all while working in harmony with nature. While there are still issues to be solved in the market maturity and technical aspects of binary-cycle generation, we continue to develop our business with the belief that we can bring about positive impact both on local communities as well as the renewable energy industry.


Promoting local awareness of geothermal energy through education

Since its establishment in 2014, the NPO "Spatt Naruko Onsen Natural Energy" has been holding courses for residents and students of the next generation in Naruko

Our Hidden Powers - Children's book on geothermal and  renewable energy

In the SDGs, raising awareness and education is one of the goals and concrete measures to tackle climate change.

Empower the young with geothermal education to achieve the goal of Carbon Neutral 2050--Baseload Power Japan supports Spatto Naruko Onsen Natural Energy (NPO)’s lecture

menuchevron-down linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram