The Ellidaar-valley is one of the most interesting recreational areas of the capital. It was proclaimed a municipal conservation area because of its natural beauty and recreational possibilities. It contains many notable historic spots and inviolate relics. The valley is about 3,5 miles long and 0,5 - 1 mile wide. The townspeople used to picnic there in the 19th century, but they sought more distant destinations after the automotive age started. Nowadays people have started noticing the valley again and enjoying its surroundings more than ever before.

The geology of the valley can be studied in Haubakkar down by the cove and estuaries of the Ellida river and explanations can be read from the sign situated there. The average flow of the Ellida river is 5,5 m³/sec.

The Municipal Waterworks exploits a part of its discharge area and probably reduces its flow by 0,6 m³/sec. Lake Ellidavatn is categorized with lakes Thingvallavatn and Myvatn. These lakes are all situated in lava areas containing voluminous cold springs and their discharges are much greater than their visible feeders. Their bottoms are covered with thick deposits of diatomites and they are all reservoirs for hydro electric power stations.

Lake Ellidavatn was enlarged considerably by the construction of the dam in 1924 - 1925. The valley is well vegetated in many places, both naturally and planted, and offers at least 160 species of flowers. The forestation started after 1920 by the planting of Rowan trees. Gardening began when people started building dwellings and holiday houses in the valley.

The Energy Authorities started the forestation of the island between the river branches after 1950. Ruins of a fullery and a tannery dating back to the late 18th century are still visible on the island. To mention a few of the breeding bird species in the valley, the most common ones are: The whooper swan, the tufted duck, the gadwall, the snipe, the redwing, the starling, the common redpoll, the wheat-ear, the wagtail, the raven and the great northern diver.

Altogether 59 bird species have been spotted there and at least 31 of them are confirmed breeding in the valley. The Ellida river has been among the best salmon rivers of the country for a long time. It also offers brown trout, river char and eel. The hydro electric power station was inaugurated in 1921.

The Energy Authority started collecting artefacts connected with its operation in 1971. Registration started in 1988, which marked the organized collection. The Electric Energy Museum, situated in the Ellidaar valley, was officially established in 1990.

The Geothermal Energy Authority exploits 8 boreholes in the valley. During the second world war there were four allied camps in the valley. Three areas of the valley are occupied by horse stables. The Open Air Museum Arbaer, which was opened in 1957, is one of the interesting faces of this recreational area. On the landfill, down by the estuaries of the river, dog owners are permitted to release their dogs to let them run around freely.  The valley paths are popular among walkers and runners.