I’m not actually convinced you can really see it at all from in the water. Certainly not an issue in the couple of times I was there
No, you are right, definitely can’t be seen from the water….
To be fair, it felt much more oppressive when we were there because there was a big building program for extending the hotel so there were some big cranes in the area which added to the industrial feel. When finished (which it probably is now) it probably obscures the power station….so you just get to look at a hotel on the water’s edge instead.
My favourite swimming experiences in the rough Reykjavik area was hooking up with some locals for a bracing (1.4 Deg C) sea swim around the outside of Nautholsvik Geothermal Beach then a good natter with them (in their woollen swimmers and hat!) in the geothermal ‘hot tub’ and steam room. Also a hike up to Seljavallalaug; digging the snow drift from the changing room door and a private swim for two up in the mountains. It’s not 40Deg, it’s not got a bar but it feels a lot more special imo. The reason it’s there is quite cool too. But then again doing the Blue Lagoon is still nice it is cheesy touristy way.