Geothermal giant Ormat announced this week it's going to Japan.

Ormat signed a cooperation agreement with Japanese construction conglomerate JFE Engineering. The deal calls for the two companies to work together in building geothermal power plants in Japan. Ormat supplies the equipment, and JFE does the work.

This is a telling move from one of the world's largest geothermal players.

There are a number of reasons Japan could be big for geothermal. The nation is a volcanic island.