NZ and Iceland Sign Deal to Advance Next-Generation Geothermal Energy

Foreign Affairs Minister Winston Peters says the agreement builds on decades of shared expertise and reflects the global respect both countries have earned for pioneering geothermal technologies.

New Zealand and Iceland—two of the world's leading nations in geothermal science—have signed a major new agreement to deepen cooperation on geothermal energy development. The Memorandum of Arrangement was formalised at COP 30 in Belém, Brazil, marking what officials describe as a new era of collaboration in clean energy innovation.

Foreign Affairs Minister Winston Peters says the agreement builds on decades of shared expertise and reflects the global respect both countries have earned for pioneering geothermal technologies.

"This agreement builds on decades of shared expertise and paves the way for further collaboration in this critical sector," Peters said. "It marks a new chapter in both nations' long-standing interest in renewable energy innovation."

A Partnership Focused on Cutting-Edge Geothermal Technology

The agreement will be delivered through a combination of:

• Joint scientific research projects

• Industry-led technical workshops

• Academic and specialist exchanges between both nations

These initiatives will focus heavily on next-generation geothermal systems, including superhot and supercritical geothermal resources—areas where Iceland and New Zealand are already global leaders.

Resources Minister Shane Jones says these technologies have the potential to "revolutionise global energy production", offering a future where geothermal plants produce far more electricity from significantly smaller drilling footprints.

"Geothermal energy could be a game-changer for secure and affordable energy in New Zealand," Jones said. "This agreement reflects our shared ambition to unlock the full potential of geothermal energy."

Supercritical Geothermal: A Transformational Energy Source

Supercritical geothermal systems tap into reservoirs of ultra-hot water—often above 374°C and at extremely high pressure—creating the potential to produce five to ten times more energy per well than conventional geothermal plants.

Global energy agencies consider supercritical geothermal one of the most promising frontier technologies for delivering round-the-clock, zero-emissions energy.

New Zealand and Iceland are two of the only countries actively exploring supercritical geothermal, giving them the opportunity to lead a new global market.

Supporting New Zealand's Energy Security and Climate Goals

The partnership aligns with the Government's long-term energy strategy and its commitment to:

• Double renewable energy generation by 2050

• Boost geothermal generation by 2040

• Strengthen national energy security

• Reduce reliance on fossil fuels and volatile global markets

Jones emphasised that geothermal energy is uniquely well-suited to New Zealand, offering both reliability and affordability: "New Zealand must ensure affordable, secure, clean energy. This partnership helps us accelerate our geothermal potential."

Collaboration Strengthened by Recent Expert Appointments

The agreement builds on growing cooperation between Wellington and Reykjavík. Earlier this year, two Icelandic technical specialists were appointed to New Zealand's International Peer Review Panel overseeing its supercritical geothermal project.

These appointments underscore Iceland's internationally recognised expertise, gained through decades of pioneering geothermal development across its volcanic landscape.

A Growing Investment in Geothermal Exploration

Last November, the Government announced it would ring-fence up to $60 million from the Regional Infrastructure Fund for geothermal exploration. The first preferred drilling site has been identified in the Taupō Volcanic Zone, home to some of the world's most accessible geothermal resources.

Early drilling in this region is expected to provide the critical data needed to advance superhot geothermal research and potentially unlock commercial-scale developments in the 2030s.

Strong Diplomacy Behind the Agreement

The pathway to today's deal began during Minister Peters' official visit to Iceland last month, where both nations agreed to expand cooperation on geothermal energy and climate-aligned technologies.

The formal signing in Brazil was carried out by:

• Simon Watts, Minister of Climate Change (New Zealand)

• Jóhann Páll Jóhannsson, Iceland's Minister of the Environment, Energy and Climate

Their meeting on the sidelines of COP 30 emphasised the importance of cross-border scientific cooperation in addressing global energy security and climate challenges.

Looking Ahead

With the agreement now in place, New Zealand and Iceland are preparing to launch their first round of collaborative projects in 2025. Officials anticipate research teams, engineers, universities and industry partners will be among the first to participate.

Both countries see geothermal energy—not just as a renewable energy option—but as a cornerstone of future energy stability and climate action.