Geothermal Cluster Map - Prof Michael Porter, Harvard Business School, 2016
Geothermal Cluster Map - Prof Michael Porter, Harvard Business School, 2016

Iceland Geothermal

Above is the cluster map of the geothermal energy sector in Iceland which was issued by Michael Porter, a professor at the Harvard Business School 2016. It shows all the detailed and important links of the geothermal energy value chain.

Iceland’s first geothermal power plant started operation in 1969, followed by two larger plants in 1978 and 1979.
With a total installed geothermal power generation capacity of 755 MW, Iceland is among the top 10 countries in the world when it comes to electricity generation from geothermal. In terms of direct use, Iceland has developed into a role model both with its extensive use for district heating (90% of all homes are heated by geothermal energy), but also in the cascaded use of geothermal heat for bathing and swimming, greenhouse operations, fish farming and more. Icelandic players have an extensive history of supporting development internationally. Through the Geothermal Training Program of UNESCO (formerly UN University), Iceland has supported the build-up of capacity in developing countries around the world contributing to large-scale development, e.g. in Kenya and other regions of this world.

What is geothermal energy?

Geothermal energy is thermal energy generated and stored in the Earth. The geothermal energy of the Earth’s crust originates from the original formation of the planet. Geothermal is location specific i.e. a resource must exist. Access to the resource is gained by drilling and getting access to steam or hot water. Geothermal is a base-load renewable energy resources.

What are the benefits of using geothermal energy?


Through proper reservoir management, the rate of energy extraction can be balanced with a reservoir’s natural heat recharge rate.

Small Footprint

Some hydropower facilities can quickly go from zero power to maximum output. Because hydropower plants can generate power to the grid immediately, they provide essential back-up power during major electricity outages or disruptions.


Geothermal power plants produce electricity consistently, running 24 hours per day / 7 days per week, regardless of weather conditions.


Modern closed-loop geothermal power plants emit no greenhouse gasses; life cycle GHG emissions (50 g CO2 eq/kWhe) are four times less than solar PV, and six to 20 times lower than natural gas.


Geothermal power plants are compact; using less land per GWh (404 m2) than coal (3642 m2) wind (1335 m2) or solar PV with center station (3237 m2)


To the right you can see the locations of the geothermal power plants of Iceland that today produce around 29% of all electricity in Iceland and a large part of the geothermal district heating in the country.

The total installed geothermal power generation capacity is 753.3 MW (March 2021).

ICELAND GEOTHERMAL is an initiative of the Iceland Renewable Energy Cluster.

This is a low-temperature plant set-up in the region of Flúðir utilising a well-deriving hot water of 120°C, with 70°C water then being used locally for heating greenhouses. The company is planning an additional similar-sized project and expansions of its existing two plants in the region.
This is a low-temperature plant, and was one of the few Kalina plants in the world. Currently, the plant is not in operation; there have been discussions on a refurbishment of the plant for power generation for several years.
The latest of the large geothermal power plants with a capacity of 90 Mwe and is in expansion phase
Nesjavellir is located about 177m above sea level. Hot water for heating purposes is pumped to a tank on a neighbouring ridge at 406 m above sea level. From there the water is supplied through 23 km of pipes to provide district heating in the greater Reykjavik area, losing only 2°C in temperature on the way.
Everything beyond the geothermal fluids generally runs into the reinjection system down to the groundwater system in the geothermal reservoir. A hydrogen sulphide abatement unit is located at the plant, which uses the Carbfix process to filter out 75% of the hydrogen sulphide and 30% of the carbon dioxide which is dissolved in the geothermal fluids and conducted into the re-injection system.
The Reykjanes Power Plant is the only seawater-cooled geothermal power plant in the world, and has one of the highest intake pressure to a geothermal turbine.
In close proximity to the Blue Lagoon geothermal spa, the main tourist attraction in Iceland, which runs on waste water from the geothermal power plant. On the plant site, the company Carbon Recycling International is currently working on a new technology for converting CO2 emissions from the plant into methanol fuel
Gufustöðin í Bjarnarflagi (Bjarnarflag)
Fuelling district heating, a brick factory, a palette factory and a geothermal spa (Jardböd vid Mývatn)