The Memorandum of Understanding, signed by Charles Hendry and his Icelandic counterpart Oddný G. Harðardóttir, could pave the way for geothermal power generated by Iceland’s volcanoes to supply the UK’s national grid.
It follows Hendry’s visit to the Hellisheidi geothermal field, located on an active volcanic ridge in the south west of the country.
In particular, the two countries pledged to exchange information on deep geothermal, explore the possibility of an interconnection between the UK and Iceland, work on renewable energy projects in developing countries and exchange information on offshore oil and gas drilling.
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.”