During a stay in Iceland last week I was taken to a Thermo Power plant 27 kms outside Reykjavik that demonstrated the benefits of a country residing on top of volcanoes; Orkuweita geothermal plant is a fantastic building and a not less fantastic story to tell: From a number of drillings down to 1- 1.5 km. beneath earth, the power and heating plant gets 200 degrees centigrade steam and hot water. Water, because the pressure is around 22 BAR. The water is separated from the steam, the steam drives a number of turbines producing 120 Megawatt. The hot water is used to heat lake water from Lake Thingvellir, and this is it’s turn used to heat the houses in Reykjavik and a population of around 170.000.
The hot water from the boreholes is re-circulated and brought back to it’s original depth to keep the pressure. It is estimated that this could last for another 1000 years.
No wonder why the Icelanders are fond of their sustainable energy – and that to the extent that they are not any more so keen on inviting in new aluminium plants as the real environmentalists think it is a shame if all this nice and green energy should be wasted on an industry that simply consumes what it can get. This will probably give Greenland a chance to attract more plants, but that’s another story! See http://www.c40cities.org/bestpractices/renewables/reykjavik_geothermal.jsp
In the meantime it is going to be interesting to see if Iceland can find out ways to export their energy without too much loss. When that day occurs, Scotland, Shetland, Orkney and the Faroe Islands will probably be the first to benefit.
In the meantime Iceland is aiming at attracting large back up centers from Google, Yahoo, IBM, MS and whoever is interested in being really green. 
Co2 savings? This power plant/heating system saves at leas4 4 mio tons of C02 pr. year.
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