This would be a great spot to take pictures of auroras. We ended up going to a location where the water bodies were closer and smaller on the night of the spectacular aurora "show".

On our last night in Reykjavik, the weather and aurora forecast seemed to be good in the early evening. This spot is located approximately 50-60km from the capital city and we prepared ourselves and drove to this location. However, the cloud cover didn't dissipate and the Icelandic Meteorological Office degraded the forecast to "0" when we were halfway down the road. So, we turned around and headed back to our hotel for a good night sleep instead. Oh, well.