The low-temperature systems form under conditions where rain water descends deep into the bedrock, draws heat from it as it ascends along fractures and dykes driven by the hydrostatic gradient and convection caused by the lighter density of hot water relative to that of cold water. Fossil fuel is used almost exclusively for motive power in the transportation sector and the large fishing fleet. The economically exploitable part of the geothermal energy resource is difficult to estimate accurately, but it is clear that only a small part of the geothermal energy resource has been tapped so far. Geothermal hot water and steam are moreover used in many novel ways in industry, typically on a small scale. The financial benefits of geothermal space heating alone as regards the import of fossil fuel comprises an annual saving of some 100 million US dollars.
Environmental benefits are enormous.
Currently there are some 30 municipal district heating systems, or hitaveitas , operating in Iceland serving about 218 thousand people. The world s largest hitaveita is the Reykjav k District Heating Service, serving some 145 thousand people or more than half the population. They serve in total some 4 thousand people. In the following each type of utilisation will be described in outline and an endeavour made to detail the more salient points. The cold climate requires heating most of the year resulting in ideal economic conditions for direct use of geothermal energy for space heating.