SSE Renewables announces Japanese offshore wind venture
SSE Renewables, the renewable energy subsidiary of SSE plc, announced today that they have signed a deal with Japanese renewable energy development company Pacifico Energy to develop offshore wind energy projects in Japan.
Key elements of the transaction include the creation of a new joint ownership offshore wind company, which will drive development activities in Japan.
The creation of the joint ownership company involves the acquisition by SSE Renewables of an 80% interest, worth $208m, in an offshore wind development platform from Pacifico.
It is hoped the move to enter Japan’s growing offshore wind market will help support the further expansion and diversification of SSE Renewables’ longer-term growth pipeline.
Japan has a target for 10 gigawatts (GW) of installed offshore wind capacity by 2030, rising to between 30GW to 45GW by 2040.
The targets are backed by a commitment to run regular offshore wind auctions for support.
By combining Pacifico Energy’s local experience with SSE’s expertise in developing, constructing and operating offshore wind farms, the new company will progress its 10GW portfolio of early-stage development opportunities.
A total of 20 Japan-based employees from Pacifico Energy will also transfer to the newly created company.
SSE Renewables currently boasts the largest offshore wind pipeline across UK and Ireland at 7GW and is currently leading the construction Seagreen, which will be Scotland’s largest offshore wind farm.
The deal should bring SSE Renewables closer to its goal of delivering 30TWh per year by 2030.
Laura Hoy, Equity Analyst at Hargreaves Lansdown: “SSE’s renewables business is making strides toward its goal to deliver 30TWh of renewable energy per year by 2030.
“The group’s inked a deal to create a new offshore wind company with Japan’s Pacifico Energy. The new organisation will operate in Japan’s offshore wind market and will start its life with 10GW worth of early-stage development projects in its portfolio.
“It’s costing SSE’s Renewables division a pretty penny though at $208m, but that’s a drop in the ocean for the wider company, which brought in profits worth £1.5bn last year.
“However, it does represent nearly a quarter of the Renewables segment’s profits and operating in Japan is a major strategic shift.
“The deal won’t do much to move the needle at SSE in terms of near term profit, but it does represent an important step to build out the renewables business – suggesting the group is increasingly focussed on a future as a global renewables giant rather than a UK utility operator.”