Macquarie Capital’s Green Investment Group and Spanish power utility Iberdrola have agreed to co-develop a portfolio of six offshore wind projects in Japan that will have a combined capacity of 3.3GW once complete.
The investment is GIG’s first in Japan and Iberdrola’s first in the country’s offshore wind sector.
The six projects, three of which will be floating, are at different stages of development but not yet under construction, a spokeswoman for GIG told Infrastructure Investor.
Development was initiated by Acacia Renewables, a platform Macquarie Capital established when it acquired RES Japan, the Tokyo-based subsidiary of UK-headquartered Renewable Energy Systems Group, in 2017.
Iberdrola will acquire a 100 percent stake in Acacia from GIG, for an undisclosed sum and will “take forward the existing offshore wind development pipeline alongside GIG as a joint venture”, according to a statement. However, GIG, which will hold an equal share with Iberdrola in the six projects, will be responsible for developing Acacia’s existing onshore wind portfolio.
This latest transaction is the second time GIG and Iberdrola have teamed up. The two firms also co-own East Anglia ONE, a 714MW wind farm located off the UK’s Suffolk coast, developed by Iberdrola’s subsidiary ScottishPower Renewables. In August 2019, GIG acquired a 40 percent stake in the £2.5 billion ($3.2 billion; €2.7 billion) project, described as one of the largest offshore wind installations in the world, while Iberdrola owns the remaining 60 percent. The project became operational in July.
According to GIG’s statement, Macquarie has to date developed 3.7GW of offshore wind and solar projects in Japan, part of its “long-standing commitment” to help the country reduce greenhouse gas emissions by 26 percent by 2030.
Promoting offshore wind
Japan has been focusing on promoting development of its offshore wind energy resources. In 2018, it enacted the Offshore Renewable Energy Act.
“Under the Offshore Renewable Energy Act, the Japanese government designates one or more promotion areas each year,” Dan Matsuda, of counsel at DLA Piper Tokyo Partnership, told Infrastructure Investor in a recent interview.
“The government [then] conducts a public auction to select a project developer, and the selected project developer for each promotion area needs to obtain FiT [feed-in tariff] approval and be granted the permit to use the relevant sea area exclusively for a certain period, for example, up to 30 years,” he said.
In July, METI and the Ministry of Land, Infrastructure, Transportation and Tourism designated four areas for promoting offshore wind energy: the sea area offshore Noshiro city, Mitane town and Oga city, in Akita Prefecture; the area offshore Yurihonjo city, also in Akita Prefecture (northern and southern sides); and the area offshore Choshi city, in Chiba Prefecture.
This was in addition to the sea area offshore Goto city, in Nagasaki Prefecture, the first area designated under the Offshore Renewable Energy Act.
According to the Japan Wind Power Association, a group of wind power developers and operators, Japan’s potential for fixed bottom and floating offshore wind energy is 128.8GW and 424.5GW, respectively.