The aim of this paper was to understand the relevance of accounting for geothermal resource dynamics for sustainable energy system planning in Iceland. This included assessing the implications of transition to electric vehicles as a decarbonisation strategy in Iceland. Therefore, the energy and transport system model (UniSyD_IS) was linked to a geothermal resource dynamics model. This allowed to capture the effects of geothermal resource utilization for electricity production on a national energy systems level. A total of 16 different scenarios that vary in the rate of economic growth, conditions for electric vehicles and consideration of geothermal resource dynamics were analysed in relation to production patterns, cost, resource availability and emissions. Incorporating geothermal resource dynamics allows to provide more holistic insights for sustainable energy system planning in Iceland, especially regarding the availability of geothermal resources and production cost. (C) 2020 Published by Elsevier Ltd.