How are 99 percent of the buildings heated in Reykjavik, the capital of Iceland? December 18, 2017 By Show answer With geothermal power – from natural hot (140 deg. F) water from an underground reservoir. The water (from Ice Age glaciers trapped by hardened lava from volcanic eruptions) is piped to radiators and hot=-water tanks throughout the city. More Geology QuestionsMore Science Questions