SSE Renewables has signed an agreement with Japan’s Pacifico Energy to create a joint ownership company that will pursue offshore wind energy development projects in Japan.
The creation of the joint ownership company involves the acquisition by SSE Renewables of an 80 per cent interest in an offshore wind development platform from Pacifico Energy.
The transaction includes the creation of a new joint ownership offshore wind company which will drive development activities in Japan, and the transfer of up to 20 Japan-based employees from Pacifico Energy to the newly created offshore wind company who will be complemented by SSE Renewables employees.
The new company will continue developing a number of early-stage offshore wind development projects geographically spread across Japanese waters, with the potential to progress to deliver multiple GWs, SSE Renewables said. These early-stage projects are expected to use a mixture of fixed and floating technology and are working towards being selected for future auctions.
The two most advanced projects have secured grid access and advanced local stakeholder engagement has been undertaken.
By combining the local preparatory development work undertaken by the Pacifico Energy team with SSE’s expertise in developing, constructing, and operating offshore wind farms, and balance sheet strength, the new entity will progress its 10 GW portfolio of early-stage development opportunities, with the most advanced aiming to enter bid rounds before or in the mid-2020s, SSE Renewables said.
Japan has offshore wind targets of 10 GW by 2030 and 30-45 GW by 2040 as the country seeks to decarbonise and achieve greater energy independence. The targets are backed by a commitment to run regular offshore wind auctions for support.
SSE Renewables has a 7 GW offshore wind pipeline across UK and Ireland and is currently leading the construction of more offshore wind than any company in the world. It has a renewable output target of 30 TWh a year by 2030, which it expects to exceed and has clear aspirations to reach a run rate of at least 1GW of new assets a year during the second half of this decade.
In the last 12 months, SSE has begun to export SSE Renewables’ capabilities in offshore wind development, construction and operation to international markets where it sees growth opportunities. Japan now joins Spain, Portugal, Denmark, and Poland as being markets where SSE Renewables is actively looking to develop offshore wind projects and this acquisition could lead to further development options in the East Asian market which is expected to deploy up to 140 GW of offshore wind by 2050.
”Today is an exciting next step for SSE Renewables as we enter Japan which has huge ambitions for offshore wind deployment,” Jim Smith, Managing Director of SSE Renewables, said.
”And in Pacifico Energy we have found a fantastic local partner with hugely complementary local capabilities, experience and insights that can help bring our expertise in developing, building and operating offshore wind to this market. We want to help realise Japan’s renewables ambitions and be a significant part of their offshore wind plans during the decades ahead, and we’re looking forward to working with the new team, as well as with local communities and other stakeholders to realise the benefits of the offshore wind industry. This is an exciting period for SSE as it continues to grow and deliver its low-carbon electricity infrastructure strategy, including a trebling of our renewables output by 2030.”
Rothschild & Co. and Freshfields Bruckhaus Deringer LLP acted as respective financial and legal advisors on the transaction.