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Reykjavík Geothermal Leads Tenerife’s Deep Drilling Push: A Bold Bid to Unlock the Canary Islands’ First Geothermal Power Future
Tenerife’s Geothermal Breakthrough: How Icelandic Expertise Is Trying to Rewrite the Energy Future of the Canary Islands
By: Robert Buluma
Deep beneath the sun-baked landscapes of southern Tenerife, something significant is unfolding. A drilling rig is slowly penetrating volcanic rock that has not been seriously tested for large-scale energy production before. The borehole has already reached around 400 metres and is expected to descend to nearly 3,000 metres as the project progresses.
What may look like a routine geological operation is, in reality, a potential turning point for the Canary Islands—and possibly for geothermal development in other island and volcanic regions around the world.
For the first time in history, serious exploration is underway to determine whether Tenerife can support geothermal power generation. If successful, the project could lead to the construction of the first geothermal power plant ever built in the Canary Islands and Spain.
The project is being led technically by Reykjavík Geothermal alongside Spanish partners and local authorities, including major private-sector investors. It represents a rare convergence of geological potential, international expertise, and urgent energy necessity.
The Canary Islands’ Energy Paradox
The Canary Islands present a striking energy contradiction. Despite being located in a region with abundant natural conditions for renewable energy development, more than 80% of electricity generation currently depends on imported oil.
This reliance creates several structural challenges:
- High electricity production costs compared to mainland Europe
- Heavy carbon emissions tied to fossil fuel generation
- Energy security risks due to import dependence
- Limited diversification of the energy mix
Electricity prices in the islands are estimated to be significantly higher than in countries like Iceland, where geothermal and hydropower dominate the grid.
At the same time, the islands face unique geographical constraints. Land availability is limited, population density is high in key areas, and tourism adds an additional seasonal energy burden. With millions of visitors each year, energy demand fluctuates sharply, putting pressure on an already fossil-heavy system.
Wind and solar energy, while present and expanding, are not enough on their own to fully replace baseload generation. Their intermittent nature requires backup systems, which today are still largely fossil-fuel based.
This is the gap geothermal energy is attempting to fill.
Why Geothermal Matters in a Place Like Tenerife
Geothermal energy offers something that wind and solar cannot provide on their own: stable, continuous baseload power.
Unlike other renewable sources, geothermal energy is not dependent on weather conditions. It is available 24 hours a day, 365 days a year, making it uniquely valuable for systems that require stability.
Tenerife’s volcanic geology suggests that significant heat sources exist beneath the surface. If accessible at economically viable depths, these reservoirs could support long-term electricity generation and direct-use applications.
Potential uses include:
- Electricity generation for the grid
- District cooling systems
- Desalination for freshwater production
- Heating for hotels, homes, and industrial facilities
This is particularly important in a tourism-driven economy where air conditioning, water supply, and hospitality infrastructure place constant pressure on energy systems.
One of the strongest arguments for geothermal development is land efficiency. Compared to wind and solar installations that require large surface areas, geothermal plants occupy relatively small footprints while producing continuous output.
In a geographically constrained island environment, this advantage becomes critical.
The Icelandic Connection: Exporting Deep-Earth Expertise
The technical backbone of the Tenerife project is Reykjavík Geothermal, an Icelandic company with extensive international experience in geothermal exploration and development.
Iceland is one of the world’s most advanced geothermal economies, with decades of experience in harnessing volcanic heat for both electricity and heating. That expertise is now being exported to regions with similar geological characteristics.
The company’s role in Tenerife is not limited to consulting. It is involved across the entire value chain:
- Early-stage exploration
- Geological and geophysical research
- Drilling operations
- Development planning
- Future operational strategy
This end-to-end involvement is part of a broader shift in how geothermal projects are structured globally. Instead of purely advisory roles, experienced developers are increasingly becoming equity participants and project architects.
The significance of this model is that it aligns technical expertise with long-term project success, rather than limiting involvement to early-stage studies.
AI’s Unexpected Role in the Partnership
One of the most unusual aspects of the Tenerife geothermal story is how the partnership itself was formed.
According to project stakeholders, the collaboration began when local partners used artificial intelligence tools to identify companies with strong global geothermal development experience.
The AI analysis pointed toward Reykjavík Geothermal as a leading candidate.
This highlights a growing trend in industrial project development: the use of AI as a discovery and matching tool in complex global industries. Instead of relying solely on traditional networks or consultants, stakeholders are increasingly using data-driven systems to identify optimal partners.
After initial contact was made, the relationship evolved through conventional means—trust-building, technical evaluation, and shared strategic alignment between Icelandic and Canary Islands stakeholders.
While AI did not “build” the partnership, it acted as a catalyst for discovery in a highly specialized sector where expertise is globally distributed but not always visible.
From Exploration to Reality: The Drilling Phase
Geothermal projects are often described as high-risk, high-reward ventures. The reason is simple: the most expensive and uncertain stage is the drilling phase.
Surface studies—geological mapping, geophysical surveys, and environmental assessments—can suggest the presence of geothermal resources. However, only drilling can confirm whether those resources are commercially viable.
In Tenerife, this phase has now begun in earnest.
Each borehole represents a significant financial investment, with drilling campaigns across multiple sites forming part of a broader exploration strategy. The current project involves drilling multiple wells across several target zones.
The cost of the drilling phase alone is estimated in the tens of millions of euros, reflecting both the depth of the wells and the technical complexity involved in volcanic terrain.
As drilling continues deeper—toward the 3,000-metre target—the probability of encountering usable geothermal reservoirs will become clearer.
At present, early indicators from previous studies are encouraging, but geothermal development always carries geological uncertainty until reservoir conditions are physically confirmed.
A System Under Pressure: Why Timing Matters
The urgency behind geothermal exploration in Tenerife is not only environmental—it is economic and infrastructural.
The Canary Islands face a long-standing dependency on imported fossil fuels. This creates vulnerability to global oil price fluctuations, supply chain disruptions, and geopolitical instability.
Additionally, the cost of electricity generation is significantly higher than in renewable-rich systems such as Iceland. This cost gap affects households, businesses, and tourism competitiveness.
At the same time, policy constraints complicate the transition. Existing energy market structures include subsidies that still favor conventional fuel-based generation. These mechanisms can slow down the adoption of cheaper and cleaner alternatives.
Geothermal energy, if proven viable at scale, could disrupt this structure by providing a stable and potentially lower-cost baseload alternative.
However, the transition is not automatic. It requires regulatory adaptation, infrastructure investment, and long-term political commitment.
Investment Scale and Economic Implications
The Tenerife geothermal initiative is not a small experimental project. It is a large-scale investment program involving multiple drilling sites and advanced engineering operations.
Each drilling campaign across a target zone represents a multimillion-euro commitment. Across all planned sites, the total investment reaches into the tens of millions of euros.
If successful, the economic implications could be substantial:
- Reduced dependence on imported fuel
- Stabilization of electricity prices over time
- New high-skilled jobs in energy and engineering
- Potential export of surplus expertise and technology
Beyond direct energy production, geothermal development often creates secondary economic benefits. These include infrastructure development, technical training, and service industry growth.
In island economies, where diversification is often limited, such spillover effects can be particularly impactful.
Broader Geothermal Momentum Worldwide
The Tenerife project is part of a wider global resurgence in geothermal energy interest.
Historically, geothermal development has been geographically limited to regions with obvious volcanic activity, such as Iceland, parts of the United States, Kenya, and Indonesia.
However, advances in drilling technology, reservoir modeling, and enhanced geothermal systems are expanding the potential reach of the industry.
Key drivers behind this renewed interest include:
- The global push for decarbonization
- Demand for reliable baseload renewable energy
- Energy security concerns in geopolitically sensitive regions
- Technological improvements reducing exploration risk
Governments and investors are increasingly viewing geothermal energy not as a niche solution, but as a critical component of future energy systems.
The Tenerife project fits squarely into this global trend, particularly as it involves cross-border expertise transfer from one of the world’s most advanced geothermal nations.
Reykjavík Geothermal’s Expanding Global Footprint
For Reykjavík Geothermal, Tenerife is one of several active international projects.
The company is currently involved in geothermal development initiatives across multiple regions, including Europe, the Middle East, and other volcanic or high-temperature zones.
Its approach reflects a shift in the geothermal industry toward integrated project development models, where companies participate in both risk and reward rather than operating solely as consultants.
This model allows for:
- Greater alignment between technical and financial outcomes
- More control over project execution
- Deeper long-term involvement in energy systems
- Stronger incentives for successful resource development
The Tenerife project is therefore both a regional energy initiative and part of a broader strategic expansion in global geothermal development.
What Success Would Mean for Tenerife
If drilling confirms viable geothermal reservoirs, the implications would be transformative.
Tenerife could potentially develop:
- Its first geothermal power plant
- A stable baseload renewable energy source
- Reduced reliance on imported oil
- Lower long-term electricity costs
- Improved energy independence
In addition, the island could become a reference point for geothermal development in other volcanic island regions.
The broader Canary Islands could follow a similar path, gradually replacing fossil fuel dependency with a more diversified and stable renewable mix.
However, it is important to emphasize that geothermal exploration is inherently uncertain. Success is not guaranteed, and results will only become clear after deep drilling confirms reservoir characteristics.
A Moment of Transition
The Tenerife geothermal project represents more than just an energy experiment. It sits at the intersection of geology, technology, international collaboration, and energy policy transformation.
It reflects a broader shift in how societies are beginning to think about energy—not just as a commodity, but as a foundation for economic stability and long-term resilience.
Whether this specific project succeeds or not, it signals a growing global recognition that geothermal energy may play a much larger role in the future energy mix than it has in the past.
For now, the drilling continues. Deep beneath Tenerife’s volcanic surface, the next chapter of the Canary Islands’ energy story is slowly being written.
Source: mbl.is
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