The UK has followed China's lead and signed an agreement with Iceland to develop geothermal research that could pave the way for power from volcanoes to supply electricity to the UK.
The deal was reached as Energy Minister Charles Hendry visited the Hellisheidi geothermal field, located on an active volcanic ridge in the south west of the country.
The MoU, signed by Charles Hendry and his Icelandic counterpart Oddný G. Harðardóttir, will strengthen the two countries’ relationship on energy issues and comes a month after China signed a similar deal to focus on geothermal power.
Charles Hendry said: “Today’s agreement will help pave the way for a closer relationship with Iceland, which I hope can yield significant benefits for the UK, including the development of geothermal power, greater use of interconnectors to transport energy under the sea, and developing oil and gas resources.
"This sort of approach can both enhance our energy security and deliver low carbon electricity in an affordable way."
In particular, the two countries pledged to:
* Exchange information on the development of the deep geothermal sector in the UK, including in the supply of heat to district heating networks
* Explore the possibility of developing electricity interconnection between Iceland and the UK, including relevant legal and regulatory issues
* Work with their respective Ministries for International Development on renewable energy projects in developing countries with a special focus on East Africa
* Exchange information regarding the development of oil and gas industries, including offshore drilling.
The UK's Renewable Energy Association welcomed the agreement but warned Ministers not to ignore the huge geothermal resource in this country.
REA's head of external affairs, Leonie Greene, said: “While we welcome greater collaboration on renewable energy, it is important that the UK Government doesn’t overlook the UK’s own deep geothermal resource, which could supply up to 20% of electricity needs and the majority of our heat needs.
“Not only is it cost effective to develop our own capacity, it provides energy security by protecting us from instability in international energy markets, and it keeps jobs and revenues in the UK economy.
“With the RO banding review decisions imminent, we are urging the Government to back British engineering, and ensure that deep geothermal gets similar support under the RO to other exciting early-stage renewables like wave and tidal power.”
Last month, the Chinese Government also signed a deal with Iceland to increase co-operation over the development of geothermal energy.
China's Premier Wen Jiabao concluded the agreement during a weekend tour of the country, which included the Thingvellir national park, home to popular tourist attractions the Gullfoss falls and the Geysir geyser.
While visiting a geothermal plant, the Chinese Premier voiced "strong support" for efforts to tap geothermal energy back home in China.
Last month's talks, during what was the first visit by a Chinese premier to Iceland, also yielded accords covering cooperation in marine and polar science and technology and solar energy.
During a visit to a geothermal power plant on an active volcanic ridge, he told students in a spontaneous 10-minute speech that more needed to be done about global warming.
A deal already existed between Iceland's Orka Energy company and the Chinese firm Sinopec, to develop geothermal energy in China.
Chinese interest in Iceland recently emerged when Chinese property magnate Huang Nubo tried to buy a large portion of land in the north of the country.
Suspicion was voiced that the purchase might help China win a foothold in the region and the deal was eventually blocked by the Icelandic government.