Fire and ice
Situated on the mid-Atlantic ridge, which is spreading apart roughly 3 centimeters per year, Iceland is the world leader in the use of geothermal energy for domestic and industrial purposes. Some 87 percent of the population enjoys district heating by geothermal energy at a price usually one-fifth of the comparable cost of electric heating. And enjoy is the key word – geothermal’s steam and radiant heat applications have spawned a spa culture with more than 170 public swimming baths, including the famous Blue Lagoon, which welcomes more guests per year than the entire population of Iceland. “Just imagine coming to Iceland without geothermal facilities,” Grímsson says.
At present, one-fourth of Iceland’s electricity demand is met by geothermal, with hydropower supplying the remaining three-quarters. Although Reykjavik Energy sometimes over-enthusiastically refers to this as 100 percent “green” power, the utility is transparent and proactive in recognizing the adverse environmental impacts of geothermal construction, runoff, and hydrogen sulfide emissions.
Iceland also offers vast wind power potential, but geothermal remains far more efficient than wind and even solar, says Reykjavik Energy CEO Bjarni Bjarnason. “There’s only one little problem – how to get at it,” he says.
Deep drilling can lead to 10 times the potency of geothermal energy tapped by larger power plants, but the exploration risk similar to that of oil, Bjarnason says.
Of course, geothermal power providers do not have access to the abundance of subsidies, loopholes and externality write-offs afforded oil giants. And while geothermal has been languishing as a renewable resource internationally, President Grímsson maintains “geothermal doesn’t need subsidies.”
“It’s good business,” he says. “It’s extraordinarily good business.”