@baldur
Is that geo-steam in the background of the picture on the left?
@piafosaure I'm not 100% sure, but the Hveragerði area got electric street lights around that time (first outside of Reykjavík) because a worker at the wool mill walking home at night fell into a geyser and died. If there was electricity for the lights then I'm guessing this power station produced electricity.
And Hveragerði was one of the first areas to do active reforestation in the post-war period so we have a little bit more trees in the area than is normal for the south of Iceland.