Japanese utility branches out

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Japan's biggest utility, Tokyo Electric Power Co (TEPCO), is to take a 50% share in Tomen Power Holdings Corp (TPHC) in a deal worth ´10 billion. TPHC is one of the world's biggest wind developers. Under the agreement, a new joint venture company, Tomen Wind Power, will be formed.

For TEPCO the deal is the latest in a series which has seen the utility branch out into other sectors and into markets outside Japan. "Due to the stagnant business climate in Japan, TEPCO wants to invest in companies with a global reach," says the company's Toru Ueno. Its activities in the wind sector have been limited and the company has just one small wind turbine in operation on Hachijojima Island. "We believe that wind energy is a global growth sector," says Ueno.

Established in November last year, TPHC operates wind power stations in the United States (114 MW), England (38 MW), Spain (157 MW), Italy (169 MW) and Japan (58 MW), with a total generating capacity of 538 MW. Including projects under development, it boasts a total wind portfolio of 3074 MW. Of this just 58.5 MW in four wind farms is in Japan, though a further 126 MW is under construction in its home market or waiting for site permits. TPHC has set a goal of installing 1000 MW of wind in Japan by 2010. With 126 MW either constructing or in negotiations, and a further 817 MW in development, TPHC is on the way to reaching that goal. Otherwise it is Spain and the United States where the compamy is most active (table).

According to TPHC's parent company Tomen Corporation, the deal will increase the overall efficiency of its global wind business thanks to TEPCO's knowledge of transmission line technologies and operation and maintenance of power generation facilities.

The agreement could encourage other Japanese utilities to get into wind development at home. "This is good for the advancement of wind energy in Japan," says Tetsunari Iida of the Green Energy Network Japan. "Up to now there has been a somewhat negative relationship between utilities and wind developers. Wind developers have wanted to sell more wind energy than the utilities wanted to buy. However, now we might see a more positive relationship."

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