Off the tourist trail in Iceland

Mount Búrfell, in southern Iceland

In front of me stands a steel disc – I am unsure how thick, but about 10ft in diameter – which is used to stop the flow of water. This normally feeds into the giant turbine behind me, which is under routine maintenance. To get to this point, I have descended three floors of spiral staircases followed by a narrow opening into a dark, cold tunnel reached by a ladder. I am deep in the Icelandic highlands, face-to-face with the pent-up energy of a vast glacial river thundering towards one of the country’s main hydroelectric power stations.

How I got to be here – at Búrfell, operated by Landsvirkjun, Iceland’s national power company – was the result of a heated conversation the previous evening at dinner. I had been talking with Friorik Pàlsson, the principal owner of Hotel Rangá, a 75-minute drive east of Reykjavik on Iceland’s southern coast. I’d booked in for a three-night stay to see the magnificent Northern Lights. What I discover is that Iceland is far more than a frozen platform from which to observe this strange dance of light visible during the Arctic winters (in summer, near-constant daylight makes viewing of the aurora borealis impossible).

Pàlsson is passionate about his country. Before he retired to own and operate hotels (Rangá is one in a portfolio of five), he was a big player in Iceland’s fishing industry: chief executive of the Union of Icelandic Saltfish Producers and then Icelandic Freezing Plants, in a country with a population of just over 300,000. Fishing has always been Iceland’s lifeblood, even more so now that it is one of few reliable sources of foreign currency following the country’s dramatic banking crisis in late 2008. Pàlsson, therefore, is very well-connected. With a click or two on his iPhone, all of Iceland starts to open up, his enthusiasm and knowledge ranging from the politics of geothermal energy to the nesting habits of the eider duck (an eiderdown duvet from the birds of the Western Fjords is among Iceland’s greatest luxuries, a double duvet costing around £2,500).

So when I casually remark on the disasters of the hydroelectric stations I have come across while travelling in remote parts of China, he challenges me to see for myself the energy-giving use of glacial water.

I know Iceland a little but this is unlike my previous visits, when I stayed in the capital Reykjavik and enjoyed the food and shopping. The latter is more attractive than ever, now that the Icelandic króna has fallen against the leading currencies. What makes Hotel Rangá stand apart is the fact that it is off the main tourist trail.

A native puffin

Iceland is becoming far more than the sum of its dramatic cliffside spurs, lava fields and glaciers: the country, after all, is a geological infant. Iceland is full of places you wouldn’t think to visit if you didn’t have someone such as Pàlsson (or his sidekick, the hotel’s well-informed manager Björn Eriksson) to unravel the destination so easily on your behalf.

It is because of them that I find myself watching a politician swinging on a rope against some cliffs in his suit in winter. Ellidi Vignisson is showing me how the Westmann Islanders collect seabird eggs (back at the hotel I enjoy some delicious oak-smoked puffin from these islands, served with blueberry compote). I eat in a roadside café, and enjoy the most perfect lunch imaginable: a moist, sweet brown rye bread topped with sliced egg and pickled herring for a mere £2. It is somewhere I would have normally driven straight past; a gas station with JCBs parked outside. I see the Northern Lights – a dancing arc of light across a sky alive with shooting stars – which have been successfully predicted by Eriksson (something of a self-styled “aurora” specialist).

I go on to meet a fisherman with the constitution of a north Atlantic seal. He also lives on the Westmann Islands, which we reach by a small plane from the airfield at Bakki, 20 minutes’ drive from the Hotel Rangá. We fly over the new ferry harbour cut into the south coast’s black sand beach, and on towards Surtsey, that extraordinary new island formed in 1963 by an underwater volcano. Despite fierce side winds, we land successfully on Heimaey, the only populated island.

Before arriving, I had been told some of the fisherman’s story. On March 11 1984, Gudlaugur Fridpórsson managed to survive by holding on to the keel when the other four crew members drowned during the sinking of their boat, the Hellisey, off the coast of Heimaey. Fridpórsson managed to swim the 6km to shore guided by a lighthouse. With bare feet, he then traversed 3km of volcanic scree. When he knocked on a door at 7am, nine hours after the boat had sunk, he became an international sensation, his survival story defying physiological probabilities.

I find him in the freezer room of a fish processing plant, Ísfélag, where I watch cod and pollock come in off the boats. I have been warned that he is not forthcoming about the trawler accident – so I end up filling the silence with a stupid question. I ask him if he still travels by boat. “I live on an island,” he says. “I have to.” I suggest he could fly. He shakes his head. “I have a fear of heights,” he says; “don’t trust planes.” Both of us are smiling.

The Northern Lights in the sky over the Hotel Rangá

Icelanders have a sense of humour. They’re inquisitive too. When a volcano blasts, they run up to take a look. This love of fun is also clear from Hotel Rangá’s oddball interiors. These include six themed suites occupying one of two wings facing the eponymous river (the land is flat and empty, and the lack of light pollution makes it ideal for viewing the northern lights). I stay in the American suite, replete with bear traps, a buffalo head and native American canoe hanging from the rafters (all authentic, I later learn, including the photography by Edward Curtis).

Rangá is something of an aesthetic mish-mash. But guests love it – I count myself among them – whether they are here just to sit in an outdoor hot tub drinking champagne in the middle of the Arctic night, or for jeep safaris of the island’s bleak interior. At the bar on my first evening, I meet a couple from England who are here for a 40th birthday; they promised each other they’d see the aurora borealis before they died. Not long ago, Rangá hosted 16 honeymooning couples from Japan who believe it is auspicious to conceive under the Northern Lights. “At the sight of the aurora, they all ran back to their rooms,” says Eriksson. “Vikings, on the other hand, believed red skies portended war.”

The week after I leave, a high-profile banking family is taking over the hotel. I ask if such a booking is unusual, only to learn the last big booking came from the Rockefellers. They, too, brought their family on a trip incorporating jeeps, fishing, riding and helicopter excursions. Maybe power plants weren’t on their itinerary but, even if they’d asked for the moon, I’m pretty sure that between them, Pàlsson and Eriksson would have somehow made it happen. Hotel Rangá is just that kind of place.

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Short days and aurora nights

If the trouble with the Icelandic outback is knowing how to explore it safely (I nearly got stuck in a river in a four-wheel drive vehicle three times) and efficiently (in winter, you need to plan more carefully than summer; January sees only six hours of sunshine a day), then I’d recommend Discover the World (+44 (0)1737 214 250; www.discover-the-world.co.uk). This is a UK-based Iceland specialist operator arranging group and private self-drive tours, tailor-made or otherwise.

A three-night “Aurora Nights” package staying at Hotel Rangá (+354 487 5700; www.hotelranga.is) including car hire and return flights with Icelandair costs from £517 per person. This is available from September to the end of March, when the Northern Lights are usually visible one night in four (there’s no guarantee, but experts currently predict a period of high aurora activity, so this year and next looks promising, with February and March the best months).