McGuinty says no to carbon tax

By Toronto Star


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Ontario Premier Dalton McGuinty says the province won't join British Columbia in creating a carbon tax to reduce greenhouse gas emissions.

He says while a carbon tax is well suited for B.C.'s economy and the direction it wants to go in, Ontario is pursuing a different strategy.

McGuinty says that includes a renewed commitment to shutting down the province's biggest polluters – its coal-fired generating plants – which his Liberals failed to accomplish during their first term in government.

The premier says his government is also investing heavily in public transit, particularly in the Greater Toronto Area.

McGuinty wouldn't say whether he would consider a carbon tax in the future, but says it definitely won't be in the next provincial budget, expected in the spring.

Alberta, by far the largest greenhouse gas emitter in Canada, also opposes a carbon tax on consumers, which became a North American first when British Columbia introduced it in its budget.

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Crucial step towards completing nuclear plant achieved in Abu Dhabi

Barakah Unit 4 Cold Hydrostatic Testing validates reactor coolant system integrity at the Barakah Nuclear Energy Plant in Abu Dhabi, UAE, confirming safety, quality, and commissioning readiness under ENEC and KEPCO oversight.

 

Key Points

Pressure test of Unit 4's reactor coolant system, confirming integrity and safety for commissioning at Barakah.

✅ 25% above normal operating pressure verified.

✅ Welds, joints, and high-pressure components inspected.

✅ Supports safe, reliable, emissions-free baseload power.

 

The Emirates Nuclear Energy Corporation (ENEC) has successfully completed Cold Hydrostatic Testing (CHT) at Unit 4 of the Barakah Nuclear Energy Plant, the Arab world’s first nuclear energy plant being built in the Al Dhafra region of Abu Dhabi, UAE. The testing incorporated the lessons learned from the previous three units and is a crucial step towards the completion of Unit 4, the final unit of the Barakah plant.

As a part of CHT, the pressure inside Unit 4’s systems was increased to 25 per cent above what will be the normal operating pressure, demonstrating, as seen across global nuclear projects, the quality and robust nature of the Unit’s construction. Prior to the commencement of CHT, Unit 4’s Nuclear Steam Supply Systems were flushed with demineralised water, and the Reactor Pressure Vessel Head and Reactor Coolant Pump Seals were installed. During the Cold Hydrostatic Testing, the welds, joints, pipes and components of the reactor coolant system and associated high-pressure systems were verified.

Mohammed Al Hammadi, Chief Executive Officer of ENEC said: “I am proud of the continued progress being made at Barakah despite the circumstances we have all faced in relation to COVID-19. The UAE leadership’s decisive and proactive response to the pandemic supported us in taking timely, safety-led actions to protect the health and safety of our workforce and our plant. These actions, alongside the efforts of our talented and dedicated workforce, have enabled the successful completion of CHT at Unit 4, which was completed in adherence to the highest standards of safety, quality, and security.

“With this accomplishment, we move another step closer to achieving our goal of supplying up to a quarter of our nation’s electricity needs through the national grid and powering its future growth with safe, reliable, and emissions-free electricity,” he added.

By the end of 2019, ENEC and Korea Electric Power Corporation (KEPCO), working with Korea Hydro & Nuclear Power (KHNP) on the project, had successfully completed all major construction work including major concrete pouring, installation of the Turbine Generator, and the internal components of the Reactor Pressure Vessel (RPV) of Unit 4, which paved the way for the commencement of testing and commissioning.

The testing at Unit 4 represents a significant achievement in the development of the UAE Peaceful Nuclear Energy Program, following the successful completion of fuel assembly loading into Unit 1 in March 2020, confirming that the UAE has officially become a peaceful nuclear energy operating nation. Preparations are now in the final stages for the safe start-up of Unit 1, which subsequently reached 100% power ahead of commercial operations, in the coming months.

ENEC is currently in the final stages of construction of units 2, 3 and 4 of the Barakah Nuclear Energy Plant, as China’s nuclear program continues its steady development globally. The overall construction of the four units is more than 94% complete. Unit 4 is more than 84 per cent, Unit 3 is more than 92 per cent and Unit 2 is more than 95 per cent. The four units at Barakah will generate up to 25 per cent of the UAE’s electricity demand by producing 5,600 MW of clean baseload electricity, as projects such as new reactors in Georgia take shape, and preventing the release of 21 million tons of carbon emissions each year – the equivalent of removing 3.2 million cars off the roads annually.

 

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Ontario introduces new 'ultra-low' overnight hydro pricing

Ontario Ultra-Low Overnight Electricity Rates cut costs for shift workers and EV charging, with time-of-use pricing, off-peak savings, on-peak premiums, kilowatt-hour details, and Ontario Energy Board guidance for homes and businesses across participating utilities.

 

Key Points

Ontario's ultra-low overnight plan: 2.4c/kWh 11pm-7am for EVs, shift workers; higher daytime on-peak pricing.

✅ 2.4c/kWh 11pm-7am; 24c/kWh on-peak 4pm-9pm

✅ Best for EV charging, shift work, night usage

✅ Available provincewide by Nov 1 via local utilities

 

The Ontario government is introducing a new ultra-low overnight price plan that can benefit shift workers and individuals who charge electric vehicles while they sleep.

Speaking at a news conference on Tuesday, Energy Minister Todd Smith said the new plan could save customers up to $90 a year.

“Consumer preferences are still changing and our government realized there was more we could do, especially as the province continues to have an excess supply of clean electricity at night when province-wide electricity demand is lower,” Smith said, noting a trend underscored by Ottawa's demand decline during the pandemic.

The new rate, which will be available as an opt-in option as of May 1, will be 2.4 cents per kilowatt-hour from 11 p.m. to 7 a.m. Officials say this is 67 per cent lower than the current off-peak rate, which saw a off-peak relief extension during the pandemic.

However, customers should be aware that this plan will mean a higher on-peak rate, as unlike earlier calls to cut peak rates, Hydro One peak charges remained unchanged for self-isolating customers.

The new plan will be offered by Toronto Hydro, London Hydro, Centre Wellington Hydro, Hearst Power, Renfrew Hydro, Wasaga Distribution, and Sioux Lookout Hydro by May. Officials have said this will be expanded to all local distribution companies by Nov. 1.

With the new addition of the “ultra low” pricing, there are now three different electricity plans that Ontarians can choose from. Here is what you have to know about the new hydro options:

TIME OF USE:
Most residential customers, businesses and farms are eligible for these rates, similar to BC Hydro time-of-use proposals in another province, which are divided into off-peak, mid-peak and on-peak hours.

This is what customers will pay as of May 1 according to the Ontario Energy Board, following earlier COVID-19 electricity relief measures that temporarily adjusted rates:

 Off-peak (Weekdays between 7 p.m. and 7 a.m. and on weekends/holidays): 7.4 cents per kilowatt-hour
 Mid-Peak (Weekdays between 7 a.m. and 11 a.m., and between 5 p.m. and 7 p.m.): 10.2 cents per kilowatt-hour
 On-Peak ( Weekdays 11 a.m. to 5 p.m.): 15.1 cents per kilowatt-hour

TIERED RATES
This plan allows customers to get a standard rate depending on how much electricity is used. There are various thresholds per tier, and once a household exceeds that threshold, a higher price applies. Officials say this option may be beneficial for retirees who are home often during the day or those who use less electricity overall.

The tiers change depending on the season. This is what customers will pay as of May 1:

 Residential households that use 600 kilowatts of electricity per month and non-residential businesses that use 750 kilowatts per month: 8.7 cents per kilowatt-hour.
 Residences and businesses that use more than that will pay a flat rate of 10.3 cents per kilowatt-hour


ULTRA-LOW OVERNIGHT RATES
Customers can opt-in to this plan if they use most of their electricity overnight.

This is what customers will pay as of May 1:

  •  Between 11 p.m. and 7 a.m.: 2.4 cents per kilowatt-hour
  •  Weekends and holidays between 7 a.m. and 11 p.m.: 7.4 cents per kilowatt-hour
  •  Mid-Peak (Weekdays between 7 a.m. and 4 p.m., and between 9 p.m. and 11 p.m.): 10.2 cents per kilowatt-hour
  •  On-Peak (weekdays between 4 p.m. and 9 p.m.): 24 cents per kilowatt-hour

More information on these plans can be found on the Ontario Energy Board website, alongside stable pricing for industrial and commercial updates from the province.

 

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Bill Gates’ Nuclear Startup Unveils Mini-Reactor Design Including Molten Salt Energy Storage

Natrium small modular reactor pairs a sodium-cooled fast reactor with molten salt storage to deliver load-following, dispatchable nuclear power, enhancing grid flexibility and peaking capacity as TerraPower and GE Hitachi pursue factory-built, affordable deployment.

 

Key Points

A TerraPower-GE Hitachi SMR joining a sodium-cooled reactor with molten salt storage for flexible, dispatchable power.

✅ 345 MW base; 500 MW for 5.5 hours via thermal storage

✅ Sodium-cooled coolant and molten salt storage enable load-following

✅ Backed by major utilities; factory-built modules aim lower costs

 

Nuclear power is the Immovable Object of generation sources. It can take days just to bring a nuclear plant completely online, rendering it useless as a tool to manage the fluctuations in the supply and demand on a modern energy grid.  

Now a firm launched by Bill Gates in 2006, TerraPower, in partnership with GE Hitachi Nuclear Energy, believes it has found a way to make the infamously unwieldy energy source a great deal nimbler, drawing on next-gen nuclear ideas — and for an affordable price. 

The new design, announced by TerraPower on August 27th, is a combination of a "sodium-cooled fast reactor" — a type of small reactor in which liquid sodium is used as a coolant — and an energy storage system. While the reactor could pump out 345 megawatts of electrical power indefinitely, the attached storage system would retain heat in the form of molten salt and could discharge the heat when needed, increasing the plant’s overall power output to 500 megawatts for more than 5.5 hours. 

“This allows for a nuclear design that follows daily electric load changes and helps customers capitalize on peaking opportunities driven by renewable energy fluctuations,” TerraPower said. 

Dubbed Natrium after the Latin name for sodium ('natrium'), the new design will be available in the late 2020s, said Chris Levesque, TerraPower's president and CEO.

TerraPower said it has the support of a handful of top U.S. utilities, including Berkshire Hathaway Energy subsidiary Pacificorp, Energy Northwest, and Duke Energy. 

The reactor's molten salt storage add-on would essentially reprise the role currently played by coal- or gas-fired power stations or grid-scale batteries: each is a dispatchable form of power generation that can quickly ratchet up or down in response to changes in grid demand or supply. As the power demands of modern grids become ever more variable with additions of wind and solar power — which only provide energy when the wind is blowing or the sun shining — low-carbon sources of dispatchable power are needed more and more, and Europe is losing nuclear power at a difficult moment for energy security. California’s rolling blackouts are one example of what can happen when not enough power is available to be dispatched to meet peak demand. 

The use of molten salt, which retains heat at extremely high temperatures, as a storage technology is not new. Concentrated solar power plants also collect energy in the form of molten salt, although such plants have largely been abandoned in the U.S. The technology could enjoy new life alongside nuclear plants: TerraPower and GE Hitachi Nuclear are only two of several private firms working to develop reactor designs that incorporate molten salt storage units, including U.K.- and Canada-based developer Moltex Energy.

The Gates-backed venture and its partner touted the "significant cost savings" that would be achieved by building major portions of their Natrium plants through not a custom but an industrial process — a defining feature of the newest generation of advanced reactors is that their parts can be made in factories and assembled on-site — although more details on cost weren't available. Reuters reported earlier that each plant would cost around $1 billion.

NuScale Power

A day after TerraPower and GE Hitachi's unveiled their new design, another nuclear firm — Portland, Oregon-based NuScale Power — announced that the U.S. Nuclear Regulatory Commission (NRC) had completed its final safety evaluation of NuScale’s new small modular reactor design.

It was the first small modular reactor design ever to receive design approval from the NRC, NuScale said. 

The approval means customers can now pursue plans to develop its reactor design confident that the NRC has signed off on its safety aspects. NuScale said it has signed agreements with interested parties in the U.S., Canada, Romania, the Czech Republic, and Jordan, and is in the process of negotiating more. 

NuScale previously said that construction on one of its plants could begin in Utah in 2023, with the aim of completing the first Power Module in 2026 and the remaining 11 modules in 2027.

NuScale
An artist’s rendering of NuScale Power’s small modular nuclear reactor plant. NUSCALE POWER
NuScale’s reactor is smaller than TerraPower’s. Entirely factory-built, each of its Power Modules would generate 60 megawatts of power. The design, typical of advanced reactors, uses pressurized water reactor technology, with one power plant able to house up to 12 individual Power Modules. 

In a sign of the huge amounts of time and resources it takes to get new nuclear technology to the market’s doorstep, NuScale said it first completed its Design Certification Application in December 2016. NRC officials then spent as many as 115,000 hours reviewing it, NuScale said, in what was only the first of several phases in the review process. 

In January 2019, President Donald Trump signed into law the Nuclear Energy Innovation and Modernization Act (NEIMA), designed to speed the licensing process for advanced nuclear reactors, and the DOE under Secretary Rick Perry moved to advance nuclear development through parallel initiatives. The law had widespread bipartisan support, underscoring Democrats' recent tentative embrace of nuclear power.

An industry eager to turn the page

After a boom in the construction of massive nuclear power plants in the 1960s and 70s, the world's aging fleet of nuclear plants suffers from rising costs and flagging public support. Nuclear advocates have for years heralded so-called small modular reactors or SMRs as the cheaper and more agile successors to the first generation of plants, and policy moves such as the UK's green industrial revolution lay out pathways for successive waves of reactors. But so far a breakthrough on cost has proved elusive, and delays in development timelines have been abundant. 

Edwin Lyman, the director of nuclear power safety at the Union of Concerned Scientists, suggested on Twitter that the nuclear designs used by TerraPower and GE Hitachi had fallen short of a major innovation. “Oh brother. The last thing the world needs is a fleet of sodium-cooled fast reactors,” he wrote.  

Still, climate scientists view nuclear energy as a crucial source of zero-carbon energy, with analyses arguing that net-zero emissions may be impossible without nuclear in many scenarios, if the world stands a chance at limiting global temperature increases to well below 2 degrees Celsius above pre-industrial levels. Nearly all mainstream projections of the world’s path to keeping the temperature increase below those levels feature nuclear energy in a prominent role, including those by the United Nations and the International Energy Agency (IEA). 

According to the IEA: “Achieving the clean energy transition with less nuclear power is possible but would require an extraordinary effort.”

 

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America Going Electric: Dollars And Sense

California Net Zero Grid Investment will fuel electrification, renewable energy buildout, EV adoption, and grid modernization, boosting utilities, solar, and storage, while policy, IRA incentives, and transmission upgrades drive reliability and long-term rate base growth.

 

Key Points

Funding to electrify sectors and modernize the grid, scaling renewables, EVs, and storage to meet 2045 net zero goals.

✅ $370B over 22 years to meet 2045 net zero target

✅ Utilities lead gains via grid modernization and rate base growth

✅ EVs, solar, storage scale; IRA credits offset costs

 

$370 billion: That’s the investment Edison International CEO Pedro Pizarro says is needed for California’s power grid to meet the state’s “net zero” goal for CO2 emissions by 2045.

Getting there will require replacing fossil fuels with electricity in transportation, HVAC systems for buildings and industrial processes. Combined with population growth and data demand potentially augmented by artificial intelligence, that adds up to an 82 percent increase in electricity demand over 22 years, or 3 percent annually, and a potential looming shortage if buildout lags.

California’s plans also call for phasing out fossil fuel generation in the state, despite ongoing dependence on fossil power during peaks. And presumably, its last nuclear plant—PG&E Corp’s (PCG) Diablo Canyon—will be eventually be shuttered as well. So getting there also means trebling the state’s renewable energy generation and doubling usage of rooftop solar.

Assuming this investment is made, it’s relatively easy to put together a list of beneficiaries. Electric vehicles hit 20 percent market share in the state in Q2, even as pandemic-era demand shifts complicate load forecasting. And while competition from manufacturers has increased, leading manufacturers like Tesla TSLA -3% Inc (TSLA) can look forward to rising sales for some time—though that’s more than priced in for Elon Musk’s company at 65 times expected next 12 months earnings.

In the past year, California regulators have dialed back net metering through pricing changes affecting compensation, a subsidy previously paying rooftop solar owners premium prices for power sold back to the grid. That’s hit share prices of SunPower Corp (SPWR) and Sunrun Inc (RUN) quite hard, by further undermining business plans yet to demonstrate consistent profitability.

Nonetheless, these companies too can expect robust sales growth, as global prices for solar components drop and Inflation Reduction Act tax credits at least somewhat offset higher interest rates. And the combination of IRA tax credits and U.S. tariff walls will continue to boost sales at solar manufacturers like JinkoSolar Holding (JKS).

The surest, biggest beneficiaries of California’s drive to Net Zero are the utilities, reflecting broader utility trends in grid modernization, with investment increasing earnings and dividends. And as the state’s largest pure electric company, Edison has the clearest path.

Edison is currently requesting California regulators OK recovery over a 30-year period of $2.4 billion in losses related to 2017 wildfires. Assuming a amicable decision by early next year, management can then turn its attention to upgrading the grid. That investment is expected to generate long-term rate base growth of 8 percent at year, fueling 5 to 7 percent annual earnings growth through 2028 with commensurate dividend increases.

That’s a strong value proposition Edison stock, with trades at just 14 times expected next 12 months earnings. The yield of roughly 4.4 percent at current prices was increased 5.4 percent this year and is headed for a similar boost in December.

When California deregulated electricity in 1996, it required utilities with rare exceptions to divest their power generation. As a result, Edison’s growth opportunity is 100 percent upgrading its transmission and distribution grid. And its projects can typically be proposed, sited, permitted and built in less than a year, limiting risk of cost overruns to ensure regulatory approval and strong investment returns.

Edison’s investment plan is also pretty much immune to an unlikely backtracking on Net Zero goals by the state. And the company has a cost argument as well: Dr Pizarro cites U.S. Department of Energy and Department of Transportation data to project inflation-adjusted savings of 40 percent in California’s total customer energy bills from full electrification.

There’s even a reason to believe 40 percent savings will prove conservative. Mainly, gasoline currently accounts for a bit more than half energy expenditures. And after a more than 10-year global oil and gas investment drought, supplies are likely get tighter and prices possibly much higher in coming years.

Of course, those savings will only show up after significant investment is made. At this point, no major utility system in the world runs on 100 percent renewable energy, and California’s blackout politics underscore how reliability concerns shape deployment. And the magnitude of storage technology needed to overcome intermittency in solar and wind generation is not currently available let alone affordable, though both cost and efficiency are advancing.

Taking EVs from 20 to 100 percent of California’s new vehicle sales calls for a similar leap in efficiency and cost, even with generous federal and state subsidy. And while technology to fully electrify buildings and homes is there, economically retrofitting statewide is almost certainly going to be a slog.

At the end of the day, political will is likely to be as important as future technological advance for how much of Pizarro’s $370 billion actually gets spent. And the same will be true across the U.S., with state governments and regulators still by and large calling the shots for how electricity gets generated, transmitted and distributed—as well as who pays for it and how much, even as California’s exported policies influence Western markets.

Ironically, the one state where investors don’t need to worry about renewable energy’s prospects is one of the currently reddest politically. That’s Florida, where NextEra Energy NEE +2.8% (NEE) and other utilities can dramatically cut costs to customers and boost reliability by deploying solar and energy storage.

You won’t hear management asserting it can run the Sunshine State on 100 percent renewable energy, as utilities and regulators do in some of the bluer parts of the country. But by demonstrating the cost and reliability argument for solar deployment, NextEra is also making the case why its stock is America’s highest percentage bet on renewables’ growth—particularly at a time when all things energy are unfortunately becoming increasingly, intensely political.

 

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Canadian Electricity Grids Increasingly Exposed to Harsh Weather

North American Grid Reliability faces extreme weather, climate change, demand spikes, and renewable variability; utilities, AESO, and NERC stress resilience, dispatchable capacity, interconnections, and grid alerts to prevent blackouts during heatwaves and cold snaps.

 

Key Points

North American grid reliability is the ability to meet demand during extreme weather while maintaining stability.

✅ Extreme heat and cold drive record demand and resource strain.

✅ Balance dispatchable and intermittent generation for resilience.

✅ Expand interconnections, capacity, and demand response to avert outages.

 

The recent alerts in Alberta's electricity grid during extreme cold have highlighted a broader North American issue, where power systems are more susceptible to being overwhelmed by extreme weather impacts on reliability.

Electricity Canada's chief executive emphasized that no part of the grid is safe from the escalating intensity and frequency of weather extremes linked to climate change across the sector.

“In recent years, during these extreme weather events, we’ve observed record highs in electricity demand,” he stated.

“It’s a nationwide phenomenon. For instance, last summer in Ontario and last winter in Quebec, we experienced unprecedented demand levels. This pattern of extremes is becoming more pronounced across the country.”

The U.S. has also experienced strain on its electricity grids due to extreme weather, with more blackouts than peers documented in studies. Texas faced power outages in 2021 due to winter storms, and California has had to issue several emergency grid alerts during heat waves.

In Canada, Albertans received a government emergency alert two weeks ago, urging an immediate reduction in electricity use to prevent potential rotating blackouts as temperatures neared -40°C. No blackouts occurred, with a notable decrease in electricity use following the alert, according to the Alberta Electric System Operator (AESO).

AESO's data indicates an increase in grid alerts in Alberta for both heatwaves and cold spells, reflecting dangerous vulnerabilities noted nationwide. The period between 2017 and 2020 saw only four alerts, in contrast to 17 since 2021.

Alberta's electricity grid reliability has sparked political debate, including proposals for a western Canadian grid to improve reliability, particularly with the transition from coal-fired plants to increased reliance on intermittent wind and solar power. Despite this debate, the AESO noted that the crisis eased when wind and solar generation resumed, despite challenges with two idled gas plants.

Bradley pointed out that Alberta's grid issues are not isolated. Every Canadian region is experiencing growing electricity demand, partly due to the surge in electric vehicles and clean energy technologies. No province has a complete solution yet.

“Ontario has had to request reduced consumption during heatwaves,” he noted. “Similar concerns about energy mix are present in British Columbia or Manitoba, especially now with drought affecting their hydro-dependent systems.”

The North American Electric Reliability Corporation (NERC) released a report in November warning of elevated risks across North America this winter for insufficient energy supplies, particularly under extreme conditions like prolonged cold snaps.

While the U.S. is generally more susceptible to winter grid disruptions, and summer blackout warnings remain a concern, the report also highlights risks in parts of Canada. Saskatchewan faces a “high” risk due to increased demand, power plant retirements, and maintenance, whereas Quebec and the Maritimes are at “elevated risk.”

Mark Olson, NERC’s manager of reliability assessments, mentioned that Alberta wasn't initially considered at risk, illustrating the challenges in predicting electricity demand amid intensifying extreme weather.

Rob Thornton, president and CEO of the International District Energy Association, acknowledged public concerns about grid alerts but reassured that the risk of a catastrophic grid failure remains very low.

“The North American grid is exceptionally reliable. It’s a remarkably efficient system,” he said.

However, Thornton emphasized the importance of policies for a resilient and reliable electricity system through 2050 and beyond. This involves balancing dispatchable and intermittent electricity sources, investing in extra capacity, enhancing macrogrids and inter-jurisdictional connections, and more.

“These grid alerts raise awareness, if not anxiety, about our energy future,” Thornton concluded.

 

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Japanese utilities buy into vast offshore wind farm in UK

Japan Offshore Wind Investment signals Japanese utilities entering UK offshore wind, as J-Power and Kansai Electric buy into Innogy's Triton Knoll, leveraging North Sea expertise, 9.5MW turbines, and 15-year fixed-rate contracts.

 

Key Points

Japanese utilities buying UK offshore wind stakes to import expertise, as J-Power and Kansai join Innogy's Triton Knoll.

✅ $900M deal: J-Power 25%, Kansai Electric ~16% in Innogy unit

✅ Triton Knoll: 860MW, up to 90 9.5MW turbines, 15-year fixed PPA

✅ Goal: Transfer North Sea expertise to develop Japan offshore wind

 

Two of Japan's biggest power companies will buy around 40% of a German-owned developer of offshore wind farms in the U.K., seeking to learn from Britain's lead in this sector, as highlighted by a UK offshore wind milestone this week, and bring the know-how back home.

Tokyo-based Electric Power Development, better known as J-Power, will join Osaka regional utility Kansai Electric Power in investing in a unit of Germany's Innogy.

The deal, estimated to be worth around $900 million, will give J-Power a 25% stake and Kansai Electric a roughly 16% share. It will mark the first investment in an offshore wind project by Japanese power companies, as other markets shift strategies, with Poland backing wind over nuclear signaling broader momentum.

Innogy plans to start up the 860-megawatt Triton Knoll offshore wind project -- one of the biggest of its kind in the world -- in the North Sea in 2021. The vast installation will have up to 90 9.5MW turbines and sell its output to local utilities under a 15-year fixed-rate contract.

J-Power, which supplies mainly fossil-fuel-based electricity to Japanese regional utilities, will set up a subsidiary backed by the government-run Development Bank of Japan to participate in the Innogy project. Engineers will study firsthand construction and maintenance methods.

While land-based wind turbines are proliferating worldwide, offshore wind farms have progressed mainly in Europe, though U.S. offshore wind competitiveness is improving in key markets. Installed capacity totaled more than 18,000MW at the end of 2017, which at maximum capacity can produce as much power as 18 nuclear reactors.

Japan has hardly any offshore wind farms in commercial operation, and has little in the way of engineering know-how in this field or infrastructure for linking such installations to the land power grid, with a recent Japan grid blackout analysis underscoring these challenges. But there are plans for a total of 4,000MW of offshore wind power capacity, including projects under feasibility studies.

J-Power set up a renewable energy division in June to look for opportunities to expand into wind and geothermal energy in Japan, and efforts like a Japan hydrogen energy system are emerging to support decarbonization. Kansai Electric also seeks know-how for increasing its reliance on renewable energy, even as it hurries to restart idled nuclear reactors.

They are not the only Japanese investors is in this field. In Asia, trading house Marubeni will invest in a Taiwanese venture with plans for a 600MW offshore wind farm.

 

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