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In this July 28, 2011 photo Bergur Sigfusson, the CarbFix experiment's technical manager, checks a valve at a test well at Reykjavik Energy's Hellisheidi geothermal power plant in Iceland. CarbFix's scientists will separate carbon dioxide from the volcanic field's steam and pump it underground to react with porous basalt rock, forming limestone, to see how well the gas most responsible for global warming can be locked away in harmless form.

Brennan Linsley

It's like Newfoundland, but with volcanoes. I think Newfoundland is more fun, but the volcanoes add a lot – namely free energy – far more energy than the whale-hunting Icelanders know what to do with.

This is the land of geothermal power. Earthquake-prone Iceland is coming apart at the seams – fortunately at a rate of only two centimetres a year. Sitting atop a mid-Atlantic range where two mighty plates are slowly pulling apart, Iceland is a place where magma from the Earth's molten core gets pretty near to the surface – hence a significant volcanic eruption here on average every four years. There's been one in each of the past two years so they're running ahead of the norm at the moment.

If you drill a hole in the ground at the right place around here and go down about two kilometres you hit water – super-heated and super-pressurized water at around 300 degrees Celsius. The Icelanders pipe it to the surface and separate the steam and the hot water. Not being an engineer, I won't attempt to describe the plumbing, but suffice it to say the steam turns the turbines to spin generators to produce electricity. The hot water gets piped to the city to heat homes and most everything else.

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I visited the second-largest geothermal installation in the world, which is about 50 kilometres outside Reykjavik. It's a big shiny plant in a spotless green meadow beside a small mountain.

It could be a park pavilion if not for all the steam coming out of it. This is one of the plants that enables Iceland to produce 100 per cent of its grid electricity from renewable sources. It's all either geothermal or hydro. They've pretty well run out of good sites for hydro but the geothermal potential seems unlimited.

Electricity prices are low in Iceland, especially for the aluminum smelting industry. But there's also the benefit of nearly free heat. After the steam has turned the generators, the super-hot water is used to heat freshwater that goes into the pipe to Reykjavik. It goes into all the homes and schools and offices and there's still enough left over to heat the sidewalks to melt the snow. They even pour hot water into the North Atlantic Ocean at one place to create a thermal beach for swimmers. I asked one Icelander what his monthly home heating bill was in winter. "I really can't remember, it's so insignificant."

Only a small fraction of Iceland's geothermal potential has been tapped – they could produce electricity galore but what would they do with the stuff? The population of the whole country is a little over 300,000.

They have been successful in attracting aluminum smelters with cheap electricity. It's so cheap that it makes it economical to ship bauxite from Australia and the Caribbean for energy-intensive smelting. There was serious planning for an undersea power cable to run all the way to Scotland – but that was before the Icelandic economy collapsed thanks to greedy bankers. Another idea they have is to use cheap electricity to electrolyze water to produce hydrogen. Hydrogen can be compressed and shipped. If hydrogen fuel-cell cars become a commercial reality, maybe some will use Iceland hydrogen.

Iceland's advantage is that the hot stuff is so close to the surface. Northern California still has the largest geothermal plant in the world, but they had to drill down five to seven kilometres and they are discovering that the water down there – not the heat – is running out. I wonder if Japan, not unlike Iceland in geology, is regretting their reliance on nuclear rather than going geothermal.

So what's missing from clean, green Iceland and their abundant renewable energy. Well, their cars and trucks of course, which are virtually 100 per cent driven by dirty imported oil. More on that next week.

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