Geothermal Energy in Iceland: History, Financing, and Future

Iceland aims to be the world’s first carbon-neutral nation; thanks in large part to hydropower and geothermal, it’s well on track to meet that goal by 2040. In this episode, Halla Hrund Logadóttir of the Iceland Energy Authority reflects on the country’s energy history and looks to its ambitious future.

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David Roberts

Iceland is an island just south of the Arctic Circle, perched directly atop a rift where two tectonic plates are drifting apart, exposing the magma below. It is a small country (physically about the size of Kentucky, with a population a little larger than Cleveland, Ohio’s), but what it lacks in size it makes up for in drama. It is a land of glaciers and volcanos, ice and fire, wind and rain and snow — and deep heat that makes them bearable.

I was there for four days last week, meeting with sustainability-related businesses, hearing about everything from micro-algae to grid monitoring to carbon recycling to using 100 percent of the fish. There’s an incredible amount of innovation going on there, and to my unending delight, a great deal of that innovation is in some way or another in a symbiotic relationship with geothermal, the heat and power that Icelanders pull from underground.

Iceland’s electricity is entirely carbon-free — roughly 70 percent hydropower and 30 percent geothermal — and so is its heating, 90 percent of which is geothermal. Overall, 85 percent of its energy consumption is carbon-free, and it is aiming for 100 percent by 2040.

To hear more about all this, I visited the Reykjavik office of Halla Hrund Logadóttir, who runs Iceland’s National Energy Authority, overseeing the country’s electricity system. She used to teach at the Iceland School of Energy at Reykjavik University and now teaches at the Harvard Kennedy School, where she co-founded the Arctic Initiative and founded the Arctic Innovation Lab.

There’s no one with a better sense of the overall state of Iceland’s energy situation. We talked about the country’s history with geothermal, its current energy mix and policies, and its race to become the world’s first fully carbon-neutral nation.

I'm here with Halla, who — I'm going to call you by your first name. Will you say your name for us?

Halla Hrund Logadóttir

So I'm Halla Hrund Logadóttir. One of these Icelandic simple names.

David Roberts

Yes, extremely. That is extremely Icelandic. And you're head of the National Energy Authority? National Energy Authority here in Iceland. And I've been visiting Iceland here for the last three or four days, visiting lots of startups and sustainable businesses of various kinds, and have found it absolutely fascinating, much more than I expected. Such a unique — so many things about Iceland in general, but Iceland's energy situation that are just absolutely unique and fascinating. So maybe the place to start is you could just tell our American audience, which is, you know, Americans are not known for their deep knowledge of other countries —

So maybe we could just start by a little history of Iceland and geothermal, which is, I think, the sort of origin story of Iceland's current situation. Maybe just tell us what happened back in the 60s and 70s and why and sort of what the result is.

Halla Hrund Logadóttir

Absolutely. And I think just to kind of start where we are at today and then looking back: Today, nine out of ten houses in the country are heated with geothermal, and overall, 85% of our primary energy use comes from renewables. So the hydropower is the other main source of electricity production, basically. But the heating mainly comes from geothermal and it is a unique situation, but it is a story that goes way back. It started with bathing that is kind of from the Vikings coming here, staying warm in this cold country. But then in the early 1900s, there was a farmer that found a way to connect his farm to a neighboring hot spring here in Mosfellssveit, which is close to Reykjavík, where we're sitting now, and a few others did the same.

And so it was a story of entrepreneurship and innovation. Then municipalities noticed this technology and it became a part of a policy, to make a long story short. But then the first drilling for geothermal was done in the early 1900s and 1928 here in Reykjavík. And I think such an important part of this story is the fact that those were small projects, but they were used to heat key buildings like the hospital you can still see downtown and a primary school that we have downtown. And this was really important because it made the technology, the fact that it worked, very visible to people and made the buy-in for the technology — you always need buy-in from voters and so forth.

The benefits were very obvious from these two key examples and from these small successes the big transition, the big story, begins, which also I think is interesting now when we think about the overall energy transition, it usually starts with small pilots that then become added up to a major success. Then we had the First World War that was a driver for the government to look closer at local energy resources. But then, as you mentioned, the big change was in the 60s and the 70s during the oil crisis in the world and we're an island, it was extremely expensive to import oil and gas, which were the main types of energy used here in Iceland at that time.

So the government started building incentives for this transition and the major part of that incentive is the Iceland Energy Fund. Do you know of that fund? So just to share a bit about it, it's a fund that was established to help mitigate risk of drilling for geothermal.

David Roberts

Oh, I did hear about that, yeah, I've had a couple of people talk to me about it. So they can loan a village money and if the village finds geothermal, they pay it back. But if they don't, the loan is just canceled, right?

Halla Hrund Logadóttir

Almost as good as that. Yes, about 50% is canceled, but definitely the main features of it. And this is what allowed small municipalities in Iceland to really focus on exploring geothermal in their regions and about 20 district heating systems were built across the island during this time from 61 to 1983 or so. And the beauty is that these are the same systems, the same infrastructure that we're still using today. So it proves as well how stable the geothermal resource is and how important it is when we're looking at the energy transition is to make the right bets when it comes to building infrastructure because it has such a long lifetime.

So these are the main factors of our history. And I think it's important to highlight this is long before climate change became a major issue, the research was not where it is today, but it was about economics, it was about energy security and then clean air. I mean, you can see pictures from Reykjavík very close, from where we're sitting now, where you have this thick smoke looming over the city and just imagining that a few decades later it would be one of the cleanest cities in the world.

David Roberts

Yeah, stable and stable prices too, right? All of a sudden prices are not going to spike or fly around. So that's an undersold aspect of renewables, is they're the same price now; they're going to be the same price in a week, in a year, and two years. We should say, I'm not sure everyone knows exactly why there's so much geothermal power in Iceland, so maybe just say real quick about the continental plates, which I've been learning a lot about this week.

Halla Hrund Logadóttir

Yes, we are situated on the boundaries of two tectonic plates that are drifting apart 2 centimeters per year. So you can say that you are either in Europe or North America when you're in Iceland, depending on location. But because of that, we have a lot of geothermal activity, we have a lot of volcanoes in Iceland, and because of the high temperature, we can both use our hot water that comes from the ground for district heating. So we're basically almost using the water directly, if you will, or we can use it for electricity production. And I think it's important to note that the planet has huge potential for geothermal and particularly when you look at using the water directly for district heating.

And very interesting things are happening in that space across the planet. When you look at areas that have high temperatures that you can produce electricity as well, those places are fewer, but there's definitely a lot of potential there as well. But as soon as you start to look at the source as simply a heat source, then it's just fascinating to look at the potential and to witness — I mean, we at the National Energy Authority, we partner with a lot of countries in Europe. We're working now, particularly with countries in Eastern Europe that are trying to get more energy independent after the war in Ukraine.

And there's resources there maybe with between 40, 60, even 70-degree temperature. These are not volcanically active areas, but they have potential to heat millions of homes and they just haven't been looking at that potential because it's been so much cheaper to import gas from Russia.

David Roberts

Well, I have a question related to that. So the government decided, I mean, it's a pretty cool story, the government decided we're going to move our country's heating over to geothermal and then just did it in like a decade. You don't hear a lot of stories about large-scale, ambitious, successful government initiatives these days. But the population of Iceland was relatively small. Today, 380,000-ish, but I assume it was even smaller back then. So a lot of your current housing stock and buildings have been built with district heating under them. So it's easy to do district heating if you're building a new development.

But a lot of other countries, Eastern European countries, US, there's already so much building stock existing. So is it more difficult to retrofit existing buildings with this than — is that a major barrier?

Halla Hrund Logadóttir

It's definitely an issue. It is much more expensive if you need to transition the whole system. But if you are using, you know, in many countries in Eastern Europe, for an example, you have like gas, you just have to change the heat source. The infrastructure are pipes. So in these cases, it can be particularly economical to just change the heat source from gas to geothermal. So those are kind of the low hanging fruits where you have existing infrastructure. Then if you look to countries for an example like China, that has been expanding quite dramatically, they have geothermal in 70 cities now.

There you're looking at China using a lot of it for new buildings as well. Right, and we're talking about then heat down to maybe 50 degrees Celsius. And there the design of the building is also using floor heat and so forth to make the biggest use of the lower temperatures. But I will add to this that of course geothermal is many things and in terms of lower temperatures and in terms of where you don't have like a centralized district heating system, you can still do a lot with if you combine different solutions with heat pumps and so forth, that also take advantage of geothermal heating in a different way.

David Roberts

Yes, this is one of my favorite projects in the US. I did a podcast about this last year, the sort of geogrid, they're doing a test up in Massachusetts where they're doing little boreholes every 50ft or so and then have heat exchangers with each house. Very excited about that. So that's heating, which is now almost all of Iceland's building heating. So when did geothermal electricity take off? It's now 30% of your electricity and the other 70% is hydro, which I assume is just rivers.

Halla Hrund Logadóttir

Yeah, glacial rivers mainly. Right, and that's another story, really. So the electricity production comes much later with the bigger plants. I know little, you visited one of them. And with geothermal you have to make sure that you manage the resource well. And as you have witnessed, one of the elements is electricity production, that we use it where it's high temperature today. But we also use different streams of the hot water for greenhouses, for drying fish, for heating sidewalks during our snowy season, which is long, I can tell you. And for all kind of our cosmetics for food supplements.

So there's a big industry like an innovation happening around the geothermal resource in general. And I would say it's very integrated in people's culture. Also, through bathing, there's not a weekend that you don't go.

David Roberts

We went to Sky Lagoon on our first night here.

Halla Hrund Logadóttir

Yeah, that's the fancy stuff.

David Roberts

Pretty amazing. Yeah. But there are little pools all over the place.

Halla Hrund Logadóttir

I challenge you to visit one of them. It's like a standard thing to do for a family in Reykjavík is to go to visit one of the pools. So it ties into also just the general healthy way of living, which I think has contributed to so many different aspects of the Icelandic society.

David Roberts

I meant to say, the thing that surprised me most in the last four days is I knew there's lots of geothermal here, I knew there's geothermal electricity here. But as you say, there's this entire ecosystem of businesses that are symbiotic with geothermal. They use the water for different things. The cold water, the hot water, the steam, they say eat the whole animal. It's like every bit of that heat and water and steam and every bit of that geothermal is used somehow, somewhere. It's amazing.

Halla Hrund Logadóttir

Yeah. It's the circular economy kind of thinking. And I have to say, because you come from the States and you have this incredible Silicon Valley that is the hub of technology in the world. We have two resource parks, one here in Reykjanes area and one here not so far from Reykjavík. These are resource parks that exactly work with the ideology that you described. So many companies in renewable energy working together. Carbfix, it has this major potential in the world of simply turning CO2 into stone, where you have basalt rock in the world and then Climeworks —

David Roberts

I talked to them yesterday.

Halla Hrund Logadóttir

Right. So you have these kind of ecosystems, and I sometimes say that these are tiny, tiny little Silicon Valleys that have so much potential to grow.

David Roberts

So much cleverness and so much innovation. It's really surprising, all the thinking that goes on around that. So this raises a question that I get a lot from people whenever I talk about geothermal, which is, how renewable is it? Is it possible to exhaust a geothermal field? Or is it if you manage it well, is it effectively renewable forever? Is there any worry about running out?

Halla Hrund Logadóttir

Yeah, I mean, definitely, you have to manage the resource well. You have to make sure that you're not pumping more out from the resource than flows into it, if you will. So there's definitely a sustainability management. But as I mentioned, we've been using our resources for decades and we are looking at developing more sites in Iceland now because there's so many tourists, there's more people, so the demand has grown a lot. But it's definitely a resource that you can count on for a long time and is renewable in the sense that if you manage it well, it maintains itself over time.

But I will also say that because one of the hidden elements of geothermal in the renewable energy category is the fact that it is baseload. You have baseload heating from geothermal, while if you look at solar and wind, these are dependent on the weather. And then as well, it has a very low footprint in terms of visibility. And we see with the energy transition across the world that visibility is usually when it relates to wind power, for example, a big factor. So geothermal has these secret elements not to add to that, it's also the price factor.

We have not had any major shifts in energy prices for heating our homes during the European energy crisis. Yes, so there's a lot of benefits that come together and of course, the fact that it is green, it's our luck that we've transitioned. So now when we're looking at closing the energy transition gap, we have a renewable energy component for the heating and heating and cooling is about 50% or up to 50% of the world's primary energy use. So once we've tackled the heating and cooling crisis in the world, we have tackled such a big part as well of the climate crisis.

And that's why geothermal is an important solution to keep as one of the puzzles. It will never be the puzzle, but it can definitely play a much bigger role than it's playing now.

David Roberts

I've said as much, many, many times. I mean, you're so lucky here that you have the two forms of renewable energy that are not variables. You have not had to deal with that kind of the same kind of worries about flexibility and balancing and everything else that you have with wind and solar. Although this does raise a question that I've had several times. One of the notable features of the climate here is extremely windy everywhere, all the time and so it's a little puzzling that there's no wind turbines anywhere. Was that a conscious decision? And is that going to stay that way?

Is there any talk about bringing wind or offshore wind? Because it's extremely windy out there.

Halla Hrund Logadóttir

Yes. So right now, as I mentioned, we have like 85% of our primary energy use covered by renewables. So we're looking at the final 15% to close the gap. And if we think about what is included in these final 15% —

David Roberts

Cars. Cars. Cars. Cars.

Halla Hrund Logadóttir

It's cars. So it's transportation on land, basically, and then it's our shipping fleet. We're a big fishing nation and then it's aviation and we are quite far along when it comes to transitioning with our transportation on land. Basically, if you look at what the public is doing it's around 65% of newly registered cars are electric in Iceland. If you count the car rentals, which are pretty big in Iceland, the proportion is lower. But we're number two in the world after Norway when it comes to being the fastest one and transitioning our car fleet.

When it comes to our shipping vessels a lot of things are happening, but it's happening slower because you need to retrofit the ships. You need to make sure that they can be the end user of e-fuels, for example. And this is where we look at, it's not about — you can't plug the ships in like you can with your electric cars. You need e-fuels. And this is where energy demand comes in. And one of the areas thus where wind power is being discussed is how to use that resource to help us with the energy transition.

David Roberts

To make e-fuels.

Halla Hrund Logadóttir

To make e-fuels. And I will say the energy mix in Iceland is really interesting because it's only 4% to 5% that are homes, the end consumers. Then you have 15% that are like normal businesses and then 80% —

David Roberts

Yes, I was going to discuss this, this was also a very great surprise to me. 80% of electricity consumption is industry. Big industry, which is not necessarily what you'd expect to find on a little island in the middle of nowhere. And not just big industry, but a relatively small handful of really big plants. Aluminum. Right. Aluminum —

Halla Hrund Logadóttir

Yes. So this became a strategy of the government earlier on. Iceland became independent in 1944 and we were looking at ways — this also ties into the geothermal story — we were looking at ways to basically become independent, diversify our economy and so forth. So attracting the aluminum industry and others to locate in Iceland was a part of the strategy to gain revenues and build up our economy. But it's definitely an unusual energy mix and keeping in mind as well that we are an island system. We do not have an interconnector to anywhere. So our way of exporting electricity, if you will, is through aluminum.

We export it through production.

David Roberts

Right. Use the clean energy to make aluminum and then export the aluminum.

Halla Hrund Logadóttir

Yes, but there's been discussions in the society about how much more should be developed. There's continuous dialogues about what for and so forth. But the government is now working on and we are contributing to a holistic policy because you have also elements of us wanting to protect nature as well as developing energy resources. Both resources, nature and energy, renewable energy are increasing in value, if you will. So it's important to find balance. Offshore is not as far in the policymaking world as onshore. We have unusually good conditions in both areas but offshore is more difficult than in some other locations in Iceland because you have deep waters, so you need floating in many cases.

And the technology is not completely cost competitive, but as I said, it is an ongoing dialogue.

David Roberts

Has the public sort of weighed in on wind turbines yet? They love geothermal. Do they have feelings about wind?

Halla Hrund Logadóttir

I think it's a much more difficult subject. In general, there's always been debate about any big projects that have an impact on Iceland's nature because we have one of the most diverse sets of nature in the world, ranging from lava to black sanded beaches, to glaciers to greenfields. It's really —

David Roberts

It's dramatic. Everywhere you go, everywhere you look, there's something dramatic.

Halla Hrund Logadóttir

Yeah. So people are conscious about making sure that there is this value that definitely plays a role in our economy as well and is important for the future, is kept at the same time that we continue to grow our potential by utilizing our green resources. So this is where long term policy making comes into play. And we certainly do have policy measures that aim to tackle exactly that. And right now, if you want to build a wind farm, it goes through Parliament, through a process called the Master Plan. So it's quite a heavy process, but whether you look left or right in the political sphere, people are in full agreement about finishing the energy transition.

David Roberts

So, transitioning to net zero is not politically controversial? More or less everyone's on board?

Halla Hrund Logadóttir

Yes, and I mean, it's a unique opportunity. We may be small, but it would be a proof, and this is the exciting part, it would be a proof that you can actually run a whole economy completely on renewables. And if we can't do that with 85% of our primary energy already coming from renewables, then the question might be, who can then?

David Roberts

Right, one thing before we move on from surface transportation — this is a big issue in the US that we come back to again and again — is electrification of vehicles the only policy or is there any talk about trying to bring in public transportation, biking and walking infrastructure, just reducing the amount of driving because it is pretty driving dependent here, similar to most American cities.

Halla Hrund Logadóttir

Yeah, definitely. I mean, there's been much more focus on biking in the recent decade or so and I would say with electric bikes that can kind of support you during the wind you mentioned. There's been a big shift for people actually using that as a part of commute and there are kind of bigger projects that relate to public transportation that needs to be improved in Iceland for sure, must be a part of the solution. So all of these factors are playing a role. And speaking of the energy fund that I mentioned earlier, the role of the fund now has been to help Iceland with the final 15% and a part of that has been to support building infrastructure for electric cars across the island because Icelanders — you know they like to drive, they need to be able to take their car and go somewhere. I think it's a similar mindset as in the US. So making sure that there is infrastructure everywhere in the island so it doesn't become a barrier for people to actually take that step and invest in an electric vehicle.

David Roberts

In terms of the huge role industry plays, aluminum in specific so there's like three giant aluminum smelters and then like two other, I think big industrial facilities. So that 80% of electricity demand is basically five, I think big factories or big — Do you worry, like if one of those closed all of a sudden you'd have a relatively giant surplus of electricity? Are you worried all how big a role they play in the electricity system or in the energy system that there's some vulnerability there? How confident are you that these industries are happy and going to stay?

Halla Hrund Logadóttir

So we have the ones you mentioned and then you have data centers and more kind of a bit more diversified set of buyers. The situation as it is today is that we have much more demand that we can produce. So if there would be such a risk that one of these players would close of course it would temporarily have an impact. But with the massive demand for renewables in the world, with the energy need that we have for our transition there would definitely be opportunities in that space.

David Roberts

Right, so there's one, e-fuels, there's one current methanol plant making green methanol. Are there more of those on the way? Is that a big growth area?

Halla Hrund Logadóttir

Yeah, one of the things that we've been doing through the energy fund is investing in the shipping industry to co-invest with companies in retrofitting ships because you need to have the user —

David Roberts

The demand, right?

Halla Hrund Logadóttir

Yeah. And that has been kind of the challenge. You establish the production and if you don't have the demand there's a difficulty in matching these two factors. So right now there are some plants that have also gotten support from the energy fund that are on the horizon. But it is an interesting market in a big transition globally. There's so many questions around how will the market look like? What will be the key fuels that will be used for different sectors? Where will Iceland be most competitive in what type of production? There are many types of e-fuels so likely we would not be producing all of them.

What needs to be the size of these projects to be cost competitive? So a lot of these questions are also reflected in the development of this industry globally and it's important to Iceland to stay tuned to be in the forefront. But also it means that there are some more risks involved.

David Roberts

Yeah, all these chicken and egg questions, although it does seem like there's going to be I think I've least read of several shipping companies that have sort of stated goals. So it does seem like there's definitely going to be some demand.

Halla Hrund Logadóttir

And we have very ambitious goals when it comes to completing our energy transition in the near future when it comes to transportation on land and when it comes to our shipping fleet. And these are also the sectors that are really important to focus on when it comes to EU legislations because one can say that these are emissions that we're also critically responsible for. Where it comes to aviation —

David Roberts

Yeah, I was going to ask what is that answer to aviation? Do you guys have one?

Halla Hrund Logadóttir

Well, I can tell you, if we start by looking at domestic flights. One of the most exciting co investments of the energy fund last year was the fact that we purchased, together with multiple parties, the first e-plane, which is basically an electric plane that you can plug it in as your phone. Or your hairdryer. And you can take off in weather like we have today. A sunny, still weather where there's almost no wind. But you can fly for half an hour. But if you look at how the technology is developing here, you can see that there's likely going to be around up to ten passenger planes, maybe a bit more, that can fly short distances.

And those would be perfect for domestic flight in Iceland because the distances are relatively short and because if it's electric planes, the infrastructure would be much less difficult. The transition, the cost of electricity would be lower. So it could actually mean a lot of interesting things for development for different towns in Iceland. So it's quite —

David Roberts

Make them more accessible.

Halla Hrund Logadóttir

Right, so it's a very exciting area to follow. But when it comes to aviation between countries, we're talking about the European Union has its goals, we're talking about different paths there and it's much more likely not one country will kind of lead the way. But these are international standards, so we will follow these standards and be at the forefront. But it's, you know, in aviation you need to follow the rules, obviously.

David Roberts

And I suppose you could be a big producer of aviation fuels too, sustainable aviation fules.

Halla Hrund Logadóttir

Right, that's also a possibility. Right.

David Roberts

Yeah. One question I got when I was discussing this on social media about Iceland is, as you say, you don't have a grid intertie with anyone else. So you're somewhat unique. Well, similar to Hawaii, actually, in being a full, self contained grid with no external connection. In Hawaii, that's an endless challenge because there's so much variable solar wind involved. Is it a challenge here because hydro and geothermal are both pretty stable and predictable. So does that make managing the grid pretty easy or do you have these balancing challenges as well?

Halla Hrund Logadóttir

You're right that it's much more stable. And definitely if we look at integration of wind and solar here in the future, it's possible to have solar even in Iceland, at least for some part of the year.

David Roberts

It seems pretty gray.

Halla Hrund Logadóttir

Yeah, well, but with technology, I mean, it can be again, a tiny little solution, but not the biggest factor. But it can play a role, especially in colder areas that do not have access to geothermal. But there is, of course, a variability still in the system. Sometimes you have more current in the glacier rivers because the melting is different depending on how the weather has been. Has it rained a lot? Has it not? So all of these natural factors matter and you can compare it to fisheries. Sometimes you can catch more cod, sometimes it needs to be a bit less.

It's like natural variability as well. But those are a small percentage of our overall system. And the way that energy companies manage these variabilities is by selling types of agreements that can be, you can cut how much you supply when you have a smaller amount of water in the hydro reservoirs and so forth. But for the biggest part of it, it's a really stable system.

David Roberts

So probably there's not a ton of storage. Are batteries, grid batteries not really a thing that you need?

Halla Hrund Logadóttir

I mean, our reservoirs are really our storage system, but we are following closely and participating in innovations when it comes to battery technology, because these types of technologies can definitely play a role for e-fuel production. They can play a role for isolated communities. We have a lot of them as well in Iceland that do not maybe have the same access to the grid. So there's definitely many use cases for such technology as well. And to be honest, if you look at the world, big innovation breakthroughs in battery technology would mean so many things.

David Roberts

Yes, it'd be very helpful for many, many economies.

Halla Hrund Logadóttir

Yeah.

David Roberts

Is there more hydro? How close is hydro to being tapped out?

Halla Hrund Logadóttir

So right now there are a few things happening in the hydro space. There are new power plants in the making.

David Roberts

Are they controversial at all? Politically controversial at all?

Halla Hrund Logadóttir

So we have this policy framework called the Master Plan. So after certain steps, projects go through the parliament and are either approved or not. So you have some hydropower projects that have been approved and are in development, and one of them is actually quite close to the final stages of permitting and so forth. So there's potential in new projects. Some potential, but there is also potential in updating or upgrading other ones. And that is a very important factor as well, because in these cases, you've gone through all the legislative processes, and it's a much better use of the resource if you just add new equipment and get more power.

So there's potential there, and then there's been development as well in smaller hydropower projects. And that is how Iceland's story and hydro actually started. So you had similar to geothermal, it was a journey led by farmers, and often you had a few farmers clustered together having a small hydro project in one of the kind of neighboring rivers or small streams. So you had over 200 such systems in Iceland before the overall grid was built for the country. So we also have some potential in these smaller projects as well. We have potential when it comes to geothermal. We have potential, of course, when it comes to wind, but I would say that there is a clear focus on how we can use these projects to complete the energy transition.

And there is a big demand from the public to make sure that we're using the resource well, that we are developing it in sites that do not impact nature too much and so forth.

David Roberts

Speaking of getting more out of existing facilities, is there innovation in trying to get more out of existing geothermal fields? Like trying to go deeper?

Halla Hrund Logadóttir

Yeah, this is a very exciting topic, actually. So you both have potential in improving geothermal by injecting water, making sure that the water you pump out, you're repumping water into the system. So that's something that can extend the lifetime and the potential of the area as well. So that's one area. But the deep drilling — we've had projects here in the past that are still ongoing in terms of drilling much deeper and getting like super hot conditions. And honestly, these are types of projects that could really bring a revolution for the geothermal industry. And what I find fascinating is too if you look at what is happening in the geothermal industry, is that you're seeing more and more of oil companies looking at this industry.

Originally, the technology comes partially from that industry. A lot of the technology, and I should mention because we're talking about earlier, how the transition went from A to B and so forth. I mean, it was a major undertaking at the time because at the time geothermal was not a plug and play technology, it was like a big innovation project. And we're speaking about Icelanders being few, we're speaking about not having a very educated workforce. So it's actually an incredible journey that this actually happened. But in terms of going back to the field today, the oil and gas sector is looking at geothermal as a part of their transition.

And there's a lot of win-win through collaboration there because technology, funding, the research part of it all can play a role. And you see that if you look at who are the biggest investors in the geothermal expansion in China, for instance, it's Sinopec. If you think about other players, Chevron has been investing in geothermal in Europe, I think Shell had a similar venture.

Drilling is their thing, so —

And the geothermal industry has suffered from — because it's an upfront cost technology. So maybe there's a potential to make sure that geothermal takes off as a part of our green transition by utilizing some of these funds and expertise and at the same time help cities and towns around the world to become less dependent on other types of fossil fuels.

David Roberts

Yeah, and so politics, it's the one thing I haven't really looked into at all since I've been here. I've just been talking to businesses and so I don't have a good sense of Iceland politics, but it seems like there's a weird — something I haven't encountered anywhere else, which is a kind of consensus and unanimity and long-term thinking and planning. Everyone moving together, everyone having the same goal. Are there political controversies around energy? Or is politics just are the fights elsewhere? Are there controversial things in the energy transition?

Halla Hrund Logadóttir

So I mentioned that completing the energy transition, different parties are unified around that goal. And people are extremely proud of the geothermal history. And actually, geothermal, I mean, it's been a part of our foreign policy. We've educated thousands of people across the planet on geothermal. I think we participated in almost all geothermal power plants that have been built elsewhere than in Iceland. So it's a big part of our identity and our expertise, our contribution to energy transition elsewhere as well. But the controversies, like in other countries, there's controversies when it comes to development of projects in terms of nature conservation versus development, even though it's renewable energy projects.

There's controversies around utilization, what type of end users should we be attracting, and so forth. So these are examples of areas that have been debated, and there's an ongoing debate in many of these fields. But I think the good news is that having such debates is an important and healthy part of the process. As long as we're all aiming to the same goal and the same destination.

David Roberts

What is the statutory goal? What are your targets, officially speaking?

Halla Hrund Logadóttir

Basically, so our energy policy aims that we become completely oil-free, if you will, by 2050, and with a coalition agreement that was actually moved a decade earlier. So that's really soon, and we're going to see how we manage.

David Roberts

So the goal is to close that 15% gap by 2040.

Halla Hrund Logadóttir

Yeah, but I mean —

David Roberts

That's pretty close.

Halla Hrund Logadóttir

Yeah, that's very close. I think the helpfulness of these ambitious goals is that it definitely starts to move the society. And there's so many factors that need to come together for the final 15% to close. You need the businesses to be willing, you need the fishing companies to be willing to retrofit or invest in new shipping. You need the tour industry on board, you need all of these different players. And then you need to make sure that the infrastructure is developed, and you need to make sure that energy producers and sellers are aiming towards the same goal.

And the beauty of having the timelines quite tangible and close in time is then the goals become real.

David Roberts

That's very real. That's very real.

Halla Hrund Logadóttir

Yeah.

David Roberts

I've encountered quite a lot of pride among the people I've talked to. One thing I keep hearing is Iceland leads the world in clean energy per capita, right? Because there's so few people. So there's relatively so much clean energy and relatively so much innovation relative to the population really fighting above your weight class or whatever the analogy is.

Halla Hrund Logadóttir

Yes.

David Roberts

Well, thank you so much for taking all this time. It's been super interesting coming here and talking to people, and it's been really impressive. So thanks for wrapping it up for us.

Halla Hrund Logadóttir

Thank you so much. And we'll try to continue the path, hopefully collaborate with as many as possible. And I think it's punching above your weight. No?

David Roberts

Punching above your weight. Thank you. It's funny that you know the Americanism better than I do.

Halla Hrund Logadóttir

Fantastic to have you. Thank you so much.

David Roberts

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