The geothermal area of Austurengjar extends from east of Lake Grænavatn to Lake Kleifarvatn in the north. Hot springs, mud pots, and fumaroles are scattered sparsely over the area. The largest and most powerful hot spring, called Austurengjahver, Engjahver, or Stórihver, is located east of Lake Grænavatn.

Geothermal activity increased greatly at Austurengjar in earthquakes in 1924 and since then Austurengjahver has been the largest hot spring in the area, a turbulent muddy hot spring. North of it are a number of smaller clay hot springs. Clay and steam hot springs appear south of Kleifarvatn when the water level is low.

Four power plant ideas in the Krýsuvík area have been discussed in the master plan. Sandfell and Sveifluháls were put in the 2nd phase in the utilization category, while Trölladyngja and Austurengjar were placed in the waiting category.

Furthermore, the power plant ideas are not considered sustainable and it looks like the energy from the areas will run out in a few decades, but in order for the power plant to be considered sustainable, the area must be used for at least 200-300 years.

10-15 holes would be drilled for a geothermal power plant if the planned 100 MW power plant in Austurengjar is built. The resulting disturbance would affect the appearance of Kleifarvatn, e.g. with associated pipelines, but today Kleifarvatn is a clear Icelandic mountain lake, mostly surrounded by mountains