Iberdrola bolsters presence in Japan's offshore wind market with new 600 MW project

Iberdrola has increased its commitment to the Japanese offshore wind market with a new 600-MW project, following the agreement with local developer Cosmo Eco Power (a subsidiary of Cosmo Energy Holdings Co. Ltd.) and engineering firm Hitz to jointly develop the Seihoku-oki project in Aomori prefecture, in the northwest of the country.

The Seihoku-oki offshore wind farm, under development, will enter round 2 of the capacity auction planned by the Japanese government between this year and 2022. Following the transaction - subject to the usual regulatory approvals - the project will be led by Iberdrola and Cosmo Eco Power, with similar voting rights, together with Hitz.

The deal takes place six months after the acquisition of 100% of Japanese developer Acacia Renewables - which has a 3,300-MW offshore wind pipeline in the south of the country. It is the company's sixth offshore wind agreement since early 2020.

Acacia Renewables has two offshore wind farms under development, with a combined capacity of 1,200 MW, which could be operational by 2028. It also has four other projects in the pipeline, with a total capacity of 2,100 MW. These six projects will be developed by Iberdrola together with Macquarie's Green Investment Group (GIG).

A market with strong growth potential

With these operations, in line with Iberdrola's strategy of leading the offshore wind market, the company will be able to compete in rounds 2, 3 and 4 - the last two scheduled for 2023/2024 - of the capacity auctions announced by the Japanese government, positioning itself in the initial development stages of a market with great growth potential.

Japan's installed offshore wind capacity currently stands at around 70 MW but is set on a strategy to decarbonise its energy mix and promote energy independence. The market is scheduled to reach 30,000-45,000 MW offshore wind installed by 2040, according to the Government-Industry Dialogue Council for Offshore Energy.

Both operations provide Iberdrola with an experienced team of market experts and renewable asset developers, as well as offices in Japan which will enable Iberdrola to lead on its own the development of new projects in the country.

One of the group's main growth drivers

The entry into a new offshore wind project reinforces Iberdrola's diversification strategy aimed at leading in this technology while consolidating its position as the world's largest renewable energy company.

Offshore wind is driving the group's growth: with 1,300 MW capacity installed - Wikinger, East Anglia ONE and West of Duddon Sands - and 2,600 MW under construction which will increase current capacity three-fold. The existing pipeline totals 19,000 MW, of which 9,000 MW are ready for construction and 10,000 MW are being developed in markets such as the United States, Sweden, Japan, Poland and Ireland.

In 2020, offshore wind projects contributed €585 million to EBITDA, after growing by 72%; this contribution will rise to €2.3 billion by 2030.

Green investments to promote economic recovery and jobs

For two decades, Iberdrola has been leading the energy transition, acting as a key driving force in the transformation of industries, the green recovery of the economy and job creation. To this end, the company has launched a record investment plan of €150 billion over the next decade - €75 billion by 2025 -, with which it plans to triple renewable capacity and double network assets while taking advantage of the opportunities of the energy revolution facing the world's major economies.

Having invested €120 billion over the past twenty years, Iberdrola is a leader in renewable energy with nearly 35,000 MW installed capacity, a volume that makes its generation fleet one of the cleanest in the energy sector.

With emissions of 98 grCO₂/kWh, which already are two-thirds lower than the European average, the strategy of investing in clean energy and networks will allow Iberdrola to be "carbon neutral" in Europe by 2030.