Due to the special geological location of Iceland, the high concentration of volcanoes in the area is often an advantage in the generation of geothermal energy, the heating and production of electricity. During winter, pavements near these areas (such as Reykjavík and Akureyri) are heated up. This causes heat to come to the surface.
Five major geothermal power plants exist in Iceland, which produce approximately 26.2% (2010) of the nation's energy. In addition, geothermal heating meets the heating and hot water requirements of approximately 87% of all buildings in Iceland. Apart from geothermal energy, 73.8% of the nation’s electricity is generated by hydro power, and 0.1% from fossil fuels.
Consumption of primary geothermal energy in 2004 was 79.7 petajoules (PJ), approximately 53.4% of the total national consumption of primary energy, 149.1 PJ. The corresponding share for hydro power was 17.2%, petroleum was 26.3%, and coal was 3%. Plans are underway to turn Iceland into a 100% fossil-fuel-free nation in the near future. For example, Iceland's abundant geothermal energy has enabled renewable energy initiatives, such as Carbon Recycling International's carbon dioxide to methanol fuel process. The following are the five largest power stations in Iceland.
- Svartsengi Power Station
- Nesjavellir Geothermal Power Station
- Krafla Power Station
- Hellisheiði Power Station
- Reykjanes Power Station
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