Geothermal energy has been an inseparable part of Icelandic nature and culture since the settlement of the island. Icelanders have always lived on land where heat rises through faults, fractures, and geothermal fields created by the country’s position directly on the Mid‑Atlantic Ridge. Long before geothermal energy became a technological resource, it was simply part of daily life: people bathed in hot springs, washed clothes in warm streams, and used naturally heated water wherever it was available.

In the 20th century, systematic use of geothermal energy began. The first attempts to heat homes with geothermal water were made in Reykjavík in 1908, and by the 1930s a formal district heating system was operating in Laugardalur. This marked the beginning of a transformation that would later reshape Icelandic society: the nationwide shift to geothermal heating. Between 1940 and 1980, drilling for geothermal water expanded across the country, and district heating systems replaced coal and oil heating. This dramatically reduced Iceland’s dependence on imported fossil fuels and improved living standards.

As technology advanced, geothermal energy began to be used for electricity production. The first major high‑temperature geothermal power plant was Krafla, built in the 1970s during the Krafla Fires. For the first time, electricity was produced from steam drawn directly from a high‑temperature geothermal system connected to an active volcanic zone. Around the same time, development began in Svartsengi, where both electricity and hot water were produced — and the plant’s wastewater later formed the Blue Lagoon.

Since the turn of the century, geothermal energy has become one of the pillars of Iceland’s energy system. Power plants such as Hellisheiði, Nesjavellir, and Þeistareykir have significantly expanded the country’s electricity production, making geothermal energy responsible for roughly 30% of Iceland’s electricity. All of these plants are located directly on active fault zones, because geothermal energy in Iceland is inseparable from the geology of the land.

Iceland sits on the boundary between the North American and Eurasian tectonic plates, which drift apart by about 2 cm per year. This rifting creates fractures, faults, and grabens that allow water to seep deep into the crust, heat up near magma bodies, and return to the surface as steam or hot water. For this reason, all major geothermal power plants in Iceland are located directly on fracture swarms within volcanic systems.

Hellisheiði and Nesjavellir lie on the Hengill fracture swarm, where magma beneath the Hengill volcanic complex heats a powerful geothermal system. Svartsengi and Reykjanes Power Plant sit on the Reykjanes fault zone, where rifting and earthquakes are constant and the geothermal fluid is even mixed with seawater. Krafla stands on the Krafla fissure swarm, where a magma chamber beneath the plant has been active for decades. Þeistareykir taps geothermal energy from a fracture zone north of Lake Mývatn, part of the same volcanic system as Krafla.

These connections between geothermal plants and fault zones are not coincidental — they are essential. Where the crust is hottest and most fractured, it is easiest to drill into high‑temperature geothermal reservoirs. The fractures act like natural pipes in the earth: they carry water downward and steam upward. When magma accumulates beneath the crust, as has been seen on the Reykjanes Peninsula since 2021, geothermal activity and pressure in the systems used by the power plants increase.

The history of geothermal energy in Iceland is therefore a story of the interaction between people and nature: how Icelanders learned to harness the forces of volcanoes and fault zones to heat homes, generate electricity, and build one of the most sustainable energy systems in the world. It is also a story of living on land that is constantly changing — where geothermal energy is both a gift and a challenge.