Iceland's famous for its breathtaking scenery, its geysers, its Blue Lagoon — and for sitting astride the Mid-Atlantic Ridge. Among energy wonks, Iceland is also well known for using its abundant renewable energy, and especially for tapping the volcanic roots of the island in developing its geothermal resources.

Iceland today generates 100% of its electricity with renewables: 75% of that from large hydro and 25% from geothermal. Equally significant, Iceland provides 87% of its demand for hot water and heat with geothermal energy, primarily through an extensive district heating system.

Altogether, hydro and geothermal sources meet 81% of Iceland's primary energy requirements for electricity, heat, and transportation. This must be a record in the modern era. Certainly Icelandic politicians think so, because they frequently make reference to it.

What Icelandic politicians don't mention as often is that half of all the electricity the country produces is provided at low cost to aluminum smelters. And no, there's no bauxite in Iceland. The country uses the low cost of its renewably-generated electricity — and just as importantly the stable price it represents over the long term — to lure smelters to the island. Iceland profits from the value added by smelting the aluminum ore from other countries.

In the spring of 2011, my wife Nancy Nies and I passed through Iceland on our way to Europe. We chose to spend a few days in Reykjavik to see first hand what modern geothermal power plants and geothermal heating look like — and to take a plunge into that famous Blue Lagoon.

Iceland

Despite its economic collapse in 2008, Iceland still has one of the world's highest standards of living.

As anyone who tried to fly to Europe in the spring of 2011 knows, the island of Iceland is geologically active — very active. The island is in the midst of an active spreading zone: half of the country lies on the North American tectonic plate, the other half lies on the Eurasian plate.

Yes, Iceland is a very small country. Despite a land area of 100,000 km², only 300,000 people inhabit the island, two-thirds of those in the capital Reykjavik. Yet, Iceland shows what can be done when a nation puts its mind to the task of eliminating fossil fuels.

Until the extensive development of the island's hydro and geothermal resources, the country was dependent upon coal and oil for providing transportation, fueling its fishing fleet, and heating its homes. The latter is not something to take lightly in a nation just south of the Arctic Circle. Iceland's older residents can remember a time when coal smoke, not steam from the island's famed fumaroles, shrouded the capital.

Iceland is a leader in geothermal development and exports its technical expertise worldwide. The country, along with the Philippines and El Salvador, is among countries with the highest penetration of geothermal energy in electricity generation worldwide. On a per capita basis, Iceland is an order of magnitude ahead of any other nation in installed geothermal generating capacity.

Geothermal Development in Iceland

Travelers in transit through Iceland may know nothing about the country's geothermal resources, but as their flight arrives at the Keflavik the airport they may look askance at their seatmates. They might sniff the air and wrinkle their noses. But it's not the passengers that stink. It's Keflavik. And that rotten-egg smell is characteristic of geothermal areas around the world. The airport sits near the end of the Reykjanes peninsula, one of the geothermal fields serving the capital, an hour's drive southwest of Reykjavik.

You know you're in Iceland when you can see the steam plumes from fumaroles and vents along the road from the airport to Reykjavik.

Icelanders use geothermal energy in two ways: for generating electricity, and for heating. They generate electricity in what is, for all practical purposes, conventional thermal power plants. Instead of burning coal in a boiler to create steam, Icelanders use steam directly from the earth.

Iceland also heats most of its domestic water, swimming pools, and buildings with geothermal fluids. In older systems, they use the geothermal fluids directly. In more modern applications, they use heat exchangers that transfer the heat of geothermal fluids to fresh water.

Maybe because of their rugged Viking roots, Icelanders swim all year — outdoors as well as indoors — in heated pools, to be sure. They've taken their national pastime and the waste heat from one geothermal power plant and turned it into a tourist attraction.

Only minutes from the international airport at Keflavik is the Blue Lagoon, a posh spa built on the waste fluids from Svartsengi geothermal power plant. It's common for transit passengers to spend a few hours luxuriating at the Blue Lagoon before catching their next flight.

Power

We met up with Guðmundur Ómar Friðleifsson, chief geologist with HS ORKA, the company that operates Svartsengi and another plant nearby on the Reykjanes peninsula.

Guðmundur, or Omar for short, picked us up in Reykjavik and took us by the hot springs and swimming complex of Laugardalur near our hotel. (Because everyone is related to everyone else, Icelanders go by first or middle names.)

Formerly with the Icelandic Geologic Survey, Omar speaks English with a Scottish brogue from his years in Edinburgh pioneering the study of resistivity in rock for locating high-temperature geothermal resources. The silver-haired geologist could be a stand-in for Professor Lidenbrock in Jules Verne's Journey to the Center of the Earth. (Icelanders are quick to point out that Jules Verne's novel is eerily similar to an earlier Icelandic tale.)

On the drive to Reykjanesvirkjun — the Reykjanes power plant — at the end of peninsula jutting into the North Atlantic, Omar explained how within one generation, following the oil crises of the 1970s, Iceland moved almost completely from heating with fossil fuels to geothermal energy.