Britain is in talks to exploit Iceland's huge geothermal resources and has drawn up plans to lay submarine cables between the two countries, Britain's energy secretary told AFP on Thursday.
"Without doubt, this is something we should be exploring," Charles Hendry, the Minister of State for Energy and Climate Change, said.
"Iceland is full of geothermal energy and there's a significant potential for exporting it," he explained. "We are very keen to be at the front of that queue but there's a lot of work still to be done."
Hendry said he was due in Iceland next month to continue the negotiations.
"This is not a done deal but there's a willingness and interest on both sides to take it forward," he revealed.
Volcanic Iceland sits on huge heat reservoirs, which could be tapped to generate large amounts of low-carbon electricity.
This could then be routed to Britain via thousands of kilometres of cables running under the Atlantic Ocean.
Britain has historically been energy self-sufficient, but its fossil-fuel resources are dwindling and there is now a pressing need to rebuild its energy infrastructure, the Conservative minister said.
Britain has already installed cables connecting it to the Netherlands and France and is seeking to expand its network.
"We certainly recognise that we are going to be more dependent on imported energy," he stressed. "The key is to have diverse supply sources so we're never overly dependent on one."
Negotiations are also underway to link the British mainland with the Channel Island of Alderney.
If successful, the scheme would enable Britain to exploit the island's huge tidal-power potential.
Explore further: Dismantling Germany's nuclear industry, piece by piece