Iceland heats virtually every home with renewable energy, with geothermal supplying more than 90% of heating and supporting its almost fully renewable power grid.

The government is expanding geothermal heating nationwide while preparing IDDP-3, a superhot geothermal well at Hengill that could deliver far greater output than conventional wells.

Prime Minister Kristrún Frostadóttir called for patient capital, durable political support and faster permitting to strengthen energy resilience before future disruptions arrive.

Icelandic Prime Minister Kristrún Frostadóttir closed Climate Week NYC’s 2026 Opening Ceremony with a call to treat energy resilience as long-term economic infrastructure rather than crisis response.

Her message drew heavily on Iceland’s own transformation. The country moved away from imported oil for heating after the energy shocks of the 1970s. It instead built a geothermal system that now reaches virtually every household.

“The transition each of you is managing — in energy, in supply chains, in infrastructure, in economic competitiveness — won’t be won by the country or the company that reacts fastest to the next disruption. It’ll be won by the one that has already built the capacity to absorb it, years before it arrives.”

From oil dependence to geothermal resilience

Iceland had used geothermal resources for centuries before the oil crisis. By the early 20th century, Reykjavík was piping hot water into homes and greenhouses. The Bjarnarflag plant later demonstrated geothermal electricity generation.

Yet imported oil still heated most homes in the early 1970s. When oil prices surged, Iceland faced the risks of relying on imported energy from distant suppliers.

The government responded by accelerating large-scale geothermal district heating. Other towns followed Reykjavík, with many completing their transitions within a decade.

Frostadóttir attributed that expansion to sustained political support, household financing mechanisms and cross-party consensus. Advances in drilling, pipelines and geothermal engineering also helped Iceland scale the technology.

Today, renewable energy heats virtually every Icelandic home, with geothermal providing more than 90% of that heating. Geothermal also contributes to the country’s almost entirely renewable electricity system.

“This is the first lesson: Resilience wasn’t built while the crisis was happening. It was built in the years after — deliberately, patiently, as a national mission — so that the next shock wouldn’t hit as hard, if at all.”

Iceland targets the next geothermal frontier

Iceland is now pushing geothermal infrastructure into areas that have yet to receive the same benefits.

Frostadóttir said her government launched “Geothermal Levels the Playing Field” this year. The initiative aims to extend geothermal heating into remaining parts of the country, including areas where geological conditions make development harder.

At the same time, Iceland is pursuing higher-temperature geothermal resources.

The flagship IDDP-3 project at Hengill is expected to drill into superhot geothermal conditions next year. According to Frostadóttir, a single well operating in these conditions could outperform multiple conventional geothermal wells.

The project draws on 25 years of research and engineering development. Iceland is also conducting longer-term research at Krafla into extremely hot geological zones.

“This is mission driven government — with the same type of conviction that once sent people from other countries to the moon. But in our case it’s aimed at the depths of the earth, and is being put to work in the service of the wider world.”

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Patient capital and policy become central

Frostadóttir framed Iceland’s experience as a model for governments and companies confronting energy security, infrastructure constraints and economic volatility.

She identified four requirements for resilient energy systems: sustained political will, patient capital, public trust and more efficient permitting.

For investors, the financing challenge is particularly important. Advanced geothermal requires capital before projects can prove their full resource potential. Exploration, drilling and research can also create long development periods before returns emerge.

Governments therefore face a parallel challenge. They must provide predictable policy frameworks while improving approval processes without weakening project standards.

“A state, a government, a public system that measures its success by what actually gets built properly, not by what gets blocked.”

Iceland looks beyond its borders

Frostadóttir also positioned Icelandic geothermal expertise as an exportable resource. She invited utilities, governments and clean-energy developers to work with Iceland on geothermal heating, baseload power and emerging drilling technologies.

Europe’s forthcoming Geothermal Action Plan could provide another route for collaboration. Frostadóttir said Iceland intends to participate closely in its development.

Her closing argument extended beyond geothermal. Energy resilience, she said, depends on building capacity before geopolitical, economic or climate shocks expose vulnerabilities.

“Start before you must. Build the resilience before the crisis tests it. Choose, deliberately, to build — more supply, more capacity, more of the things that will carry you through — rather than managing the scarcity of what you already have.”

For executives, investors and policymakers, Iceland’s experience puts the focus on infrastructure built over decades. As governments seek secure clean power alongside decarbonisation, geothermal offers one route to combine domestic energy supply, baseload generation and long-term resilience.