A seven-member group led by Hitachi Zosen Corp. (TYO: 7004) intends to invest $1.5 billion in developing offshore wind farms in Japan. The group aims to complete 7.5 megawatts of pilot plants by 2016, with the entire project built over 10 years and commanding a capacity of 300 megawatts.
The group includes major players like Toshiba Corp. (PINK: TOSBF), the Japan Weather Association, and JFE Holdings Inc. (PINK: JFEEF). The initiative is just the latest in a series of swings toward heavy investing in renewable power development in Japan after the Fukushima disaster.
Japanese power utilities are under mandates to buy quotas of electricity from renewable projects at above-market rates, and Japan also has a highly alluring feed-in tariff. The tariff, introduced by the Japanese government back in July, offers 23.1 yen per kilowatt hour for 20 years for clean energy projects. This applies to wind power, and is just about double the market rate for industrial power.
The group may eventually form one company explicitly for this project and seek additional funding, Hitachi Zosen said in a statement.
After Nikkei newspaper broke the news yesterday, Hitachi Zosen rose almost 3.5 percent, with final gains of 1.2 percent to settle at 88 yen. JFE Holdings rose to 1,008 yen, and Toshiba remained stable.