SPX on Tuesday announced a $100 million deal to supply equipment for five new geothermal power plants in Iceland. 

The utility company Orkuveita Reykjavikur plans to build the power plants at the base of the Hengill volcano. The plants are scheduled to begin production as early as 2010 and will produce up to a total of 225 megawatts. 

SPX will contribute a custom-designed surface steam condenser, pumps that will make the system operate and a cooling tower, said Keith Hancock, a spokesman for SPX, which has done business in Iceland before. 

The deal is the latest sign that geothermal power – a renewable energy that has received less attention thansolar for example – could be taking off.

Power companies have been harvesting geothermal energy for decades, and locations with ideal conditions for extracting steam from deep underground are limited. Geothermal power comes from collecting and piping hot water and steam to a plant to drive electricity generators. But new technologies that could drive down power plant construction cost and in some cases create new hot water reservoirs in previously inaccessible locations are attracting venture investors (see AltaRock Breaks New Ground with Geothermal Power). 

The successes of these new technologies would be a boon for SPX, which supplies cooling systems, pumps, valves, transformers and other products for energy exploration and power plants. The company has engineered systems, including its Air2Air water-recovery system, which can save up to 20 percent of a power plant’s water use by capturing some of the water evaporated from the cooling tower (see Water Plant Goes on Water Diet).

“The industry is rapidly growing, with an 182 percent investment increase last year. It appears to continue this year,” said Mark Taylor, an analyst with New Energy Finance, a London-based financial research firm. 

The increase includes the privatization of the Philippines’ national energy company, which was sold off in pieces. 

Investors have been pleased with SPX’s performance, sending the stock (NYSE: SPW) up 30 percent so far this year. The new contract in Iceland also helped to push up the stock by 2.29 percent to $136 per share in recent trading.

Iceland was an early player in the geothermal industry. According to the Icelandic bank Glitnir, the first use of geothermal energy on this volcanic country occurred when a farmer connected a concrete pipe from a hot spring to his house in 1907. Glitnir is focused on renewable energy and has offices in the U.S., China, Russia and other countries. Geothermal energy heats 90 percent of Icelandic households today.

Worldwide, 24 countries produce geothermal electricity, with a total of 10 gigawatt capacity, Taylor said. According to Glitnir, the worldwide installed capacity is 9 gigawatts. The U.S. remains the largest producer in the world.