Heat Pumps

Until recently, geothermal energy has been economically feasible only in areas where thermal water or steam is found at depths less than 3 km in restricted volumes, analogous to oil in commercial oil reservoirs. The use of ground source heat pumps has changed the economic norms. In this case, the earth is the heat source for the heating and/or the heat sink for cooling, depending on the season. This has made it possible for people in all countries to use the earth's heat for heating and/or cooling. It should be stressed that heat pumps can be used basically anywhere. The significant fluctuations of oil prices caused by political unrest in key oil producing regions should encourage governments to focus on indigenous energy sources to meet their basic energy requirements. Developments in the deregulation of the electricity markets and integration of the electricity networks in Europe have destabilised consumer electricity prices. This makes ground source heat pumps a favourable alternative for base load heat sources in countries where electric heating is common.

Heat pumps have not found much use in Iceland, since sufficient cheap geothermal water for space heating is commonly available. Subsidies of electrical and oil heating have also led to reluctance to invest in heat pumps. However a recent legislation has been set that allows users of subsidized electrical heating to get a contribution to improve or convert their heating system. The contribution corresponds to subsidies over 8 years. It is thus considered likely that heat pumps will become competitive in those areas of the country where water with temperature above 50°C is not found. In these places, heat pumps can be used to replace or reduce the use of direct electrical heating.