By the Blouin News Business staff

Geothermal power in Iceland steams ahead

by in Europe.

A geothermal energy plant in Iceland, Jan 14, 2015. Images Etc Ltd/Getty Images

70% of Iceland’s energy comes from geothermal plants like this one, seen on January 14, 2015. Images Etc Ltd/Getty Images

Landsvirkjun, the power company of Iceland, announced on Monday the start of construction of the Theistareykir geothermal power plant’s 45MW phase I. Expected to be operational in the fall of 2017, the plant will “increase the electricity supply in the North East of Iceland, which is a prerequisite for expanding the industrial sector in the area,” said Landsvirkjun chief executive Hordur Arnarson. A phase II expansion is already under consideration, since the power production license issued by the National Energy Authority is for a 100MW geothermal plant in the region.

Drawing on its active volcanic geography since the early twentieth century, Iceland is now a world leader in geothermal energy, which produces about 70% of the country’s energy consumption. 39% of its geothermal energy is used for electricity generation, with a total capacity of over 5,000GW hours per year in 2013, and 45% is used to heat buildings. The hot water from a geothermal plant delivered by pipeline to the capital Reykjavik is the flagship example of geothermal energy providing 90% of the country’s municipal heating needs. Geothermally heated water in Iceland is also used in greenhouses, fish farming, snow melting, pools, spas, and other industries, according to the Japan Times. A national survey found that geothermal power provided $480-830 million in total economic benefits to Iceland, equivalent to 4-6% of the country’s GDP in 2010.

Crucially, Iceland has been able to generate geothermal power without compromising the environment, its biggest tourism draw. In fact, the Blue Lagoon, the most famous tourist destination in the country, was formed in 1976 during operations at the nearby geothermal power plant. In the following years, people began to bathe in the unique water for its supposed health benefits, and the site developed different spa services and products over the years. Today, the Blue Lagoon is a part of the Svartsengi Resource Park, which is home to five cutting-edge companies built on ecological balance, economic prosperity, and social progress, notes the Japan Times.

Additionally, a new photovoltaics manufacturing plant that hopes to produce the world’s cheapest solar silicon will be built in Iceland, due in large part to cheap geothermal electricity and abundant aluminum. California-based Silicor Materials and its German contractor SMS Siemag confirmed this deal in late March. Based in the port of Grundartangi, the plant will produce 16,000 metric tons of polysilicon annually, using a novel process that will supposedly use two-thirds less electricity than the norm.

Countries as diverse as Japan and St. Lucia are very interested in developing their own geothermal potential, and they can learn a lot from Iceland. The Iceland Geothermal Conference will be held in April 2016 to promote this renewable energy and for the industry to share its experiences. The previous conference, held in March 2013, drew roughly 600 people from 40 countries. Halldor Elis Olafsson, Iceland’s Tokyo embassy trade representative, said at an informational event on March 27 that “only 0.1% of the stored heat in the crust of the Earth would satisfy global energy consumption for 10,000 years. It’s our pleasure if we could contribute to the energy production of other countries, making use of the history and technology of Icelandic geothermal power generation.”