The Hugarró development’s anchor are the geothermal pools. Needless to say we need hot water. We have already discussed the alternative if we don’t find (enough) geothermal water: C02 heat pumps.
But what are the actually chances of failure and which factors play a role? We dove deeper into this subject. Below the results of our research.
The most important distinction first
Almost every published statistic on geothermal well failure is based on power generation wells — where “success” means enough steam to drive a turbine, typically requiring 200°C+ at high flow rates. Our target is fundamentally different:
Our needs: 7–10 L/s at 70°C — a bar so low that many wells classified as “failures” in academic studies would comfortably pass for our purposes.
The IFC’s global study — the largest geothermal drilling database ever compiled — makes this explicit: “a dry well is a rarity — almost all wells flow to some extent” and “a well was only considered successful if the capacity was above a certain threshold.” 1 That threshold is set for power production — not for our modest direct-use application.
What the numbers actually say
Global baseline (IFC database)
| Stage | Success rate |
|---|---|
| Exploration wells | ~60% |
| Development wells | ~75% |
| Operational (established field) | ~80% |
| Overall global average | ~78% |
Iceland high-enthalpy – over 200 °C (213 wells studied)
| Wells drilled | Success rate |
|---|---|
| First well (no prior data) | 43% |
| After 5 wells | 60% |
| After 15 wells (plateau) | 74% |
Low-temperature Iceland — our actual peer group
Iceland has drilled approximately 900 low-temperature wells since 1928, successfully supplying ~90% of the country’s space heating. 4 The track record of the low-temperature programme is exceptional precisely because the bar is lower — 70°C water is found across a much wider geographical area and shallower depth range than the 200°C+ needed for power generation.
Real examples near analogous settings:
- Thelamörk, N-Iceland: productive fracture intersected at just 450m depth, yielding 17 L/s at 91°C — more than double our target, at less than half our planned depth 2
- Hjalteyri, Eyjafjörður: well HJ-19 to 1,450m following ground magnetic survey yielded 200 L/s at 90°C — the most productive low-temperature well in that region 3
What the magnetic survey does — and doesn’t — do
This is where honesty matters for investors:
| What the survey achieves | What it cannot guarantee |
|---|---|
| Maps subsurface fracture zones and fault lines | Exact fracture intersection at drill point |
| Identifies low-resistivity zones (geothermal fluid indicators) | Water temperature at depth |
| Eliminates obviously wrong locations | “Bad luck” — local absence of fractures at chosen point |
| Reduces “wrong area” risk dramatically | The final 10–15% site-specific uncertainty |
The research is direct on this: “pre-drill derisking techniques have not greatly mitigated the risk factors — there is a relatively small improvement in success rates between exploration and development wells.” 1 What surveys do is eliminate the worst outcomes — drilling in completely the wrong location. What they cannot do is guarantee fracture intersection at the exact drill point. That residual uncertainty is irreducible with current technology.
The IFC study describes this remaining risk as simply “bad luck — local absence of fractures, difficult to predict even with surveys.” 1
Our specific probability — After survey and pre-drills
Combining all factors — Iceland’s geological advantage, our low target, our pre-drill programme, the Hvalfjörður geological context, and proven nearby production at Hvalur:
| Risk factor | General statistics | Our adjusted probability | Why |
|---|---|---|---|
| True dry well (no water at all) | ~5% globally | <2% | Iceland’s volcanic geology always produces some water |
| Water found but below 70°C | ~4% (high-temp studies) | <3% | 70°C is easily achievable at 900–1,500m in Hvalfjörður |
| Water found, right temp, wrong flow (<7 L/s) | ~10–15% | ~8–12% | Our 7 L/s target is very modest; partially mitigated by directional drilling |
| Full success (≥7 L/s at ≥70°C) | 74–78% baseline | ~85–90% | Lower bar + better geology + survey + pre-drills |
The honest summary
| Question | Answer |
|---|---|
| Can the survey eliminate failure risk? | No — it reduces it, not eliminates it |
| What is the residual risk after full exploration programme? | ~10–15% of not meeting our specific target |
| What is the risk of finding absolutely nothing? | <2% in Iceland’s geology |
| Most likely failure mode | Missing the fracture zone at the drill point — “bad luck” |
| Does this justify the backup system? | Absolutely yes |
In plain terms: after a thorough magnetic survey, shallow pre-drills, and with the geological context of Hvalfjörður behind us, the probability of finding sufficient water for our modest needs is approximately 85–90%. The remaining 10–15% is not ignorance or poor planning — it is the irreducible geological uncertainty that every geothermal project carries, regardless of how much exploration is done first.
That is precisely why our CO₂ heat pump backup system exists, and why it was engineered in full detail rather than treated as a footnote.