There is potential to generate 40% of Icelandic energy requirements from geothermal sources. This reduces the need to import expensive fossil fuels.
The cost of geothermal energy is stable over time compared to that of oil. This protects the economy from rapidly changing oil prices.
The use of geothermal energy has also benefited the environment due to lower CO2 emissions compared to fossil fuel power plants.
Besides the economic and environmental benefits, the development of geothermal resources has had a desirable impact on social life in Iceland. The supply of geothermal water for heating and industry led to the formation of several new rural towns and improved the living conditions of a large part of the population.
Geothermal swimming pools have developed into social meeting places for all generations. They have become culturally important to Icelandic people and are tourist attractions, e.g. the Blue Lagoon.