By Ian McConnell

Business Editor

PERTH-based energy giant SSE is entering the Japanese offshore wind market through a $208 million acquisition and the formation of a joint ownership company to drive development activity.

The group’s SSE Renewables business has signed an agreement with Pacifico Energy, described by the Scottish company as “one of Japan’s largest developers of renewable energy”, to create a joint ownership company which will “pursue offshore wind energy development projects" in the east Asian country.

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 and its affiliates for $208m, of which $30million is deferred consideration subject to various conditions.

The price is subject to “customary completion adjustments”, SSE noted.

Commenting as the deal was unveiled yesterday, SSE renewables managing director Jim Smith said: “Today is an exciting next step for SSE Renewables as we enter Japan which has huge ambitions for offshore wind deployment.”

SSE noted the transaction included the “acquisition of a number of early-stage offshore wind development projects geographically spread across Japanese waters, with the potential to progress to deliver multiple GWs (gigawatts).

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It 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.”

SSE added: “By combining the significant local preparatory development work undertaken by the experienced 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 10GW portfolio of early-stage development opportunities, with the most advanced aiming to enter bid rounds before or in the mid-2020s. The new company will continue to collaborate fully and openly with local communities and authorities and aim to provide best-in-class integration of offshore wind farms with the local environment.”

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It noted “Japan has clear offshore wind targets of 10GW by 2030 and 30GW to 45GW by 2040 as the country seeks to decarbonise and achieve greater energy independence".

SSE added: “The targets are backed by a commitment to run regular offshore wind auctions for support.”

Mr Smith said: “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 Japan.”

He added: “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... 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."