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SSE Plc formed a joint venture in Japan to gain a foothold in one of the most promising markets for offshore wind.
The Scottish utility, one of the companies behind the world’s largest offshore wind park, will pay $208 million to take an 80% stake in a joint venture with Pacifico Energy, one of Japan’s largest renewable energy firms, it said in a statement on Wednesday.
The expansion comes after activist investor Elliott Investment Management called for the company to spin off its renewable arm. Elliott is now said to be one of its top five shareholders. SSE has said no decision has been made.
Japan has big plans for its offshore wind market, targeting 10 gigawatts by 2030 and 30-45 gigawatts a decade later. SSE has so far been focused on the U.K. but said in March it was looking for a move into Japan to leverage its expertise. The company is developing the 3.6-gigawatt Dogger Bank project off the east coast of England, the largest of its kind.
Rothschild & Co. and Freshfields Bruckhaus Deringer LLP acted as respective financial and legal advisers on the transaction.
Separately, SSE said that output at its renewables unit in the U.K. fell as much as 32% in the first half, or 11% below its own target. Britain experienced a period of particularly low wind earlier this month that led to record power price spikes.
“This shortfall was driven by unfavorable weather conditions over the summer, which was one of the least windy across most of the U.K. and Ireland and one of the driest in SSE’s hydro catchment areas in the last seventy years,” the company said.
