, Japan

Japan is investing heavily in renewables projects abroad: analyst

Are local opportunities no longer interesting?

Several years of US$20-30b annual domestic Japanese solar PV investment—over 2013 through 2015—made Japan the second largest installer of solar PV globally behind China. The Institute for Energy Economics and Financial Analysis (IEEFA) revealed how Japanese energy-investment capital is being pulled inextricably now toward overseas renewable-energy projects.

IEEFA's report—“Japan: Greater Energy Security Through Renewables – Electricity Transformation in a Post-Nuclear Economy”—details how the country is at a crossroads in how it decides where to go from here. One hint on which way this decision will turn is in Japanese renewable investments abroad.

Japanese companies, working in their own backyard, have gained important expertise and a deep understanding of the full implications of rapidly-evolving renewable energy technology. It’s also raised awareness of investment opportunities emerging elsewhere in the inevitable transition toward a lower-emission global energy market.

Here's more from IEEFA:

Investors are keen for renewables, a phenomenon that is freshly apparent in Japan’s continuing momentum across both domestic and overseas activity.

Since January, a series of mid-scale Japanese solar projects have progressed. First Solar announced it has secured US$240 million in financing from a Mizuho Bank syndicate for its 60MW Ishikawa Sogo solar project.

Thai Solar Energy acquired the rights to develop a US$539 million, 155MW solar project in Onikobe, Miyagi prefecture. Nippon Renewable Energy has commenced a 41MW solar project in Tochigi prefecture.

Tokyo Gas in conjunction with Shizen Energy has announced a new 60MW renewable joint venture project, part of a 600MW solar pipeline. LG Group of Korea has teamed up with Canadian Solar and Hanwhat Asset Management to develop a US$143 million, 55MW solar project at the Shin Mine site in Japan’s Yamaguchi prefecture. And the 31MW Solar Farm Minami Satuma also reached financial close, supported by a power purchase agreement from Kyushu Electric.

Even with all this activity, Japanese solar investment is actually being wound back to more sustainable levels. But an interesting companion trend is emerging: Leading Japanese companies are starting to look overseas for further opportunities in the renewable energy sector.

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