The lagoon is a man-made lagoon which is fed by the water output of the nearby geothermal power plant Svartsengi and is renewed every two days. Superheated water is vented from the ground near a lava flow and used to run turbines that generate electricity. After going through the turbines, the steam and hot water passes through a heat exchanger to provide heat for a municipal water heating system. Then the water is fed into the lagoon for recreational and medicinal users to bathe in.