Geothermal power station. Water vapour rising from cooling towers at a geothermal power station. A geothermal power station generates electricity by harnessing the energy in water and steam that have been heated naturally within the Earth's crust. In areas of volcanic activity this hot water and steam lies at or near the surface. The steam is passed through turbines to generate electricity. The efficiency of the turbines is doubled by using cooling water (from a river) to condense the steam after it passes through the turbines. This creates a vacuum that draws more steam into the turbines. This is Wairakei Geothermal Power Station, New Zealand. It began generating power in 1958.