BRIEF DESCRIPTION OF THE COUNTRY'S RELATIONSHIP WITH SDG 7 

Iceland is one of the world’s strongest renewable-energy pioneers, particularly in geothermal and hydropower energy. Virtually all of the country’s electricity is generated from renewable sources, with approximately 73% coming from hydropower and 26% from geothermal energy. Around 85% of Iceland’s total primary energy supply comes from domestically produced renewables, placing the country among the world leaders in renewable-energy use (Government of Iceland, 2023). 

Iceland is especially pioneering in the direct use of geothermal energy for heating. Approximately 99% of domestic heating comes from renewable sources, with geothermal hot water alone providing around 90%. Over the twentieth century, Iceland transformed itself from a country dependent on imported coal and other fuels into an economy where practically all stationary energy comes from domestic renewable resources, demonstrating the potential of renewable energy to strengthen both sustainability and energy independence (Government of Iceland, 2023; International Energy Agency Geothermal, n.d.). 

CURRENT CHALLENGES AND RECENT DEVELOPMENTS 

Despite this exceptional renewable-energy system, Iceland has not completely eliminated fossil fuels. Road transportation, aviation and the fishing fleet continue to rely substantially on petroleum products, meaning that the next stage of Iceland’s energy transition involves extending renewable energy beyond electricity and heating. The country aims to become independent of fossil fuels by 2050 and is pursuing electrification and alternative fuels for sectors that are difficult to decarbonise (Government of Iceland, 2023). 

Another challenge is ensuring that further geothermal and hydropower development remains environmentally sustainable. Geothermal reservoirs can be overexploited if extraction exceeds their sustainable capacity, while new electricity infrastructure can conflict with nature conservation. Iceland must therefore balance growing electricity demand and renewable-energy expansion with responsible resource management and environmental protection, making it an important model for the long-term management of a mature renewable-energy system (Government of Iceland, n.d.; International Energy Agency, 2024).

LIST OF REFERENCES 

Government of Iceland. (2023). Voluntary National Review 2023. United Nations High-Level Political Forum on Sustainable Development. https://hlpf.un.org/sites/default/files/vnrs/2023/VNR%202023%20Iceland%20Report.pdf

Government of Iceland. (n.d.). Geothermal. Retrieved October 20, 2026, from https://www.government.is/topics/business-and-industry/energy/geothermal/

International Energy Agency. (n.d.). Iceland. Retrieved October 20, 2026, from https://www.iea.org/countries/iceland

International Energy Agency Geothermal. (n.d.). Iceland. Retrieved October 20, 2026, from https://www.iea-gia.org/our-members/iceland

International Energy Agency. (2024). The Future of Geothermal Energy. https://www.iea.org/reports/the-future-of-geothermal-energy