The renewables offshoot of the Perth-headquartered power giant has signed an agreement with Pacifico Energy, one of Japan’s largest developers of renewable energy, to create a joint ownership company that will pursue offshore wind energy development projects in the East Asian nation.
The move involves the acquisition by SSE Renewables of an 80 per cent interest in an offshore wind development platform from Pacifico Energy. It will help support the further expansion and diversification of the Scottish group’s longer-term growth pipeline, bosses noted.
The transfer of up to 20 Japan-based employees from Pacifico Energy to the newly created offshore wind company will be complemented by SSE Renewables employees.
Japan has offshore wind targets of 10 gigawatts by 2030 and 30-45GW by 2040 as the country seeks to decarbonise and achieve greater energy independence. Those targets are backed by a commitment to run regular offshore wind auctions for support.
Jim Smith, managing director of SSE Renewables, said: “Today is an exciting next step for SSE Renewables as we enter Japan which has huge ambitions for offshore wind deployment. 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.”
SSE Renewables said it had the largest offshore wind pipeline across the UK and Ireland, at 7GW, and was leading the construction of more offshore wind than any company in the world. It has a renewable output target of 30TWh a year by 2030, which it expects to exceed.
Laura Hoy, equity analyst at financial services provider Hargreaves Lansdown, said: “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 $208 million [£154m], but that’s a drop in the ocean for the wider company, which brought in profits worth £1.5 billion last year. However, it does represent nearly a quarter of the Renewables segment’s profits and operating in Japan is a major strategic shift.”
She added: “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 focused on a future as a global renewables giant rather than a UK utility operator.”