Research on Iceland’s energy resources goes back to the 18th century. Systematic energy research by Icelandic government institutes started in 1945 and has been carried out continuously ever since. Iceland GeoSurvey and its predecessor have from the outset played a key role in this work. This research and the activities of the Icelandic power industry have resulted in that over 50% of the primary energy use in Iceland at the present has its source in geothermal energy.
In accordance with the European Union’s directive, the Icelandic parliament adopted in 2003 laws on the deregulation of the electricity market in Iceland. The supervision of the deregulated market was transferred to National Energy Authority, as well as increased role in administrative and regulatory work regarding management of non-biological natural resources. As a consequence, the research activities and related services were separated from National Energy Authority and Iceland GeoSurvey was formed in July 2003.
ÍSOR´s research history commences when engineer, Dr. Gunnar Böðvarsson, arrives from his studies. He was employed for geothermal studies at the State Electricity. Gunnar focused on basic research in the early years and implemented geophysical strategies in geothermal exploration.
A Geothermal Division was formally established. Gunnar Böðvarsson was appointed director until 1964. During the forties and fifties research was focused on the possible utilization of geothermal for energy production as well as further exploration of geothermal for space heating.
Guðmundur Pálmason, physical engineer, becomes head of the geothermal department with the State Electricity, later National Energy Authority. In the fifties and sixties the role of the company expanded significantly and the institute performed all the major basic research in the fields of geosciences, land surveying, engineering, hydrology and marine geology. Many of the pioneers in the fields of geology and energy joined the company during those years such as Kristján Sæmundsson, Gunnar Þorbergsson, Sveinbjörn Björnsson and Jens Tómasson.
A turning point in energy research in Iceland occurred in the early 1970s with major development in hydropower and associated research. The sharp rise in oil prices led to increased heating costs at a time when most houses were heated with oil. The government decided to replace oil heating by using renewable energy sources, in particular geothermal where possible or hydropower. The state allocated substantial funds for this research, and a number of young geologists, physicists and engineers were employed in this sector. These people form the core of experts at ÍSOR today.
As development in geothermal research increased so did collaboration with foreign research institutes, universities and various companies regarding research on oil and gas resources in the seabed. The results have indicated that favorable conditions for the formation of oil and gas may have existed on the Jan Mayen Ridge and in a sedimentary graben off North Iceland. These studies have now led to the allocation of licenses to oil companies for further exploration on parts of the Jan Mayen Ridge.
The GeoScience Division of the National Energy Authority of Iceland was established when the geothermal- and hydro departments were combined. Ólafur G. Flóvenz was appointed general director. The following years were characterized by increasing interest in geothermal power plants and associated research. Significant progress was achieved in areas such as geothermal exploration and reservoir engineering. There was, for example, improvement in reinjection in low temperature fields which is of vital importance for some district heating power plants.
Iceland GeoSurvey, ÍSOR, was established as an independent state institute. The first five years were characterized by the construction of high temperature power plants and the number of employees rose to more than 90. During those years ÍSOR built up a substantial inventory of machinery and logging tools for research and measurements and managed to accumulate surplus revenues.