Perth, Scotland-based Scottish and Southern Energy (LSE: SSE) announced today that it's moving into geothermal power with an investment of up to $29.6 million in cash for a 20 percent stake in Geothermal International.

Coventry, England's Geothermal International is a supplier of ground source heating and cooling systems with operations in the U.K. and Ireland, and other parts of Europe.

Ian Marchant, chief executive of Scottish and Southern, said, "SSE is rapidly building a strong portfolio of clean energy businesses that cover almost every part of the renewable and alternative energy market in the U.K."

"Geothermal energy has been an obvious missing piece in this portfolio and this deal fills the gap very effectively."

The company said its investment in Geothermal International would be made on a phased basis over the next six months.

Brian Davidson, CEO of Geothermal International, said, "The investment and strategic partnership with SSE is a vote of confidence for the technology by one of the U.K.'s leading utility companies."

"This partnership will provide numerous commercial and strategic opportunities for GI, and help to grow the business to the next stage of development."

Scottish and Southern said Geothermal International is primarily active in the commercial building sector, installing over 1,300 ground source heat pump systems since the company was established in 2000.

Scottish and Southern said that amounts to over 90 megawatts of installed capacity, sized from 6 kilowatts to 10 MW.