August 11, 2020 Read More →

Japanese utilities see expansion opportunities in booming Texas electricity market

S&P Global Market Intelligence ($):

Texas’ booming energy market is attracting interest from overseas, including Japanese investors. Two Japanese energy companies have in recent weeks made their first investments in the U.S. renewable energy sector, looking to capitalize on expected continued growth in the Electric Reliability Council of Texas Inc. market, while a third Japanese company has expanded its U.S. presence by investing in its second renewable energy asset in Texas.

On July 10, Kansai Electric Power Co. Inc. teamed up with Michigan-headquartered utility company CMS Energy Corp. to acquire the 525-MW Aviator Wind Project in Coke County, Texas, from Ares Management Corp. The deal closed Aug. 6. CMS owns 51%, Kansai Electric owns 48.5% and Ares funds own the remaining 0.5%.

The Aviator Wind project is the first renewable energy holding in the U.S. for Osaka-headquartered Kansai Electric. The company has partial ownership interests in two operating gas-fired plants in the PJM Interconnection LLC region. It has also invested in onshore wind farms in Finland and Ireland, according to a news release, as well as the Triton Knoll and Moray East offshore wind farms supplying the U.K.

The new investments mark the latest step in Japan’s growing involvement in overseas energy projects. A number of Japanese energy companies have invested in the European offshore wind sector for nearly a decade. In its home islands, Japan by 2030 wants renewable energy resources to make up 22% to 24% of its power supply, primarily from solar and offshore wind.

Tokyo Gas Americas Ltd., a new subsidiary of Tokyo Gas Co. Ltd., on July 29 announced the acquisition of the 500-MW Aktina Solar Project (Ramsey) in Wharton County, Texas, from Nashville, Tenn.-headquartered private developer Hecate Energy. The deal, which closed Aug. 5, is the first international solar project that Tokyo Gas has seen through from construction to completion. The first phase of the Aktina project is expected to be in commercial operation in mid-2021, and its output will be sold into the ERCOT market.

On Aug. 5, J-POWER USA Development Co. Ltd., a unit of Tokyo-based Electric Power Development Co. Ltd., announced its second U.S. renewable energy project with AP Solar Holdings LLC, a Texas-based developer. Called Charger Solar, the 400-MW facility will be located in Refugio County, Texas, midway between Houston and San Antonio. Construction is set to begin in the second quarter of 2021, with the project in operation in 2023. In April, the two companies said they had teamed up to develop a 350-MW solar project, to be in operation in 2022, in Wharton County, Texas, supplying ERCOT’s Houston zone.

[Michael Lustig]

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