The governments of UK and Ireland will sign a memorandum of understanding (MoU) to explore the possibilities of cooperation in the renewable energy space.

The MoU will call for the establishment of closer integration of electricity markets to achieve cost effective, sustainable energy development while reducing fossil fuel dependence.

Irish Minister for communications, energy and natural resources Pat Rabbitte remarked that the country had potential to generate far greater wind energy than it required for domestic consumption.

"The opportunity to export this green power presents an opportunity for employment growth and export earnings which we must seize if we can. We will work closely with the UK government so we are in a position to move towards a formal agreement on energy trading," Rabbitte explained.

UK secretary of state for energy and climate change Edward Davey noted, "Trading power with Ireland could increase the amount of green power in our energy mix and potentially bring down costs for UK consumers."

UK trade body, RenewableUK, welcomed the developments and said that it could mark the beginning of an ambitious project, delivering both economic and environmental benefits to the two countries.