Japanese Renewable Energy - Top Wind Energy Stocks

It is somewhat ironic that when the massive earthquake and tsunami struck Japan in March it proved catastrophic for the nuclear power plants sited in the danger zone.

Yet at the Takine Ojiroi Wind Farm, also in the danger zone, the turbines “did what they were designed to do – they swayed, they stopped, they electronically checked themselves and automatically restarted” (in the words of a CNN report).

At the end of 2010 Japan had an installed wind power capacity of 2,304 MW, according to the Global Wind Energy Council. This ranked it 12th in the world, well behind the two global leaders, China (42,287 MW) and the US (40,180 MW).

The paltry 221 MW that the country added during 2010 was 18th highest in the world, again well behind the leaders China (16,500 MW) and the US (5,115 MW).

Given Japan’s huge power requirements, it is clear that wind energy has not been a priority.

Nevertheless, in May 2011 the Japanese Prime Minister announced that plans to expand the country's nuclear capacity would be put on hold. Instead, the country would seek to develop renewable energy.

The Prime Minister set a target - by around 2021 Japan should be receiving 20 per cent of its power needs from renewable energy sources, more than double the current figure (which mainly comprises hydroelectric power).

As I have already noted, he put the stress on solar energy, in which Japan is a technological leader. He noted that solar power is steadily falling in price, and should cost one third of what it does now by 2020, and one sixth of the present price by 2030.

So wind energy is not expected to play a hugely significant role in the new Japanese push into renewable energy.

Despite this, Japan has some companies with an active involvement in wind energy developments, particularly in the US.

These are such large corporations that their wind energy work is unlikely to have a huge impact on profits - or the share price.

But the Japanese moves into renewable energy could become a big theme, with the power to move the stock prices of all relevant companies. Investors interested in the megatrends that are shaping our globe should watch the following three companies.

Mitsubishi Heavy Industries (7011.TYO) is the only prominent Japanese manufacturer of wind turbines, supplying mainly the US market and ranked among the top 15 turbine producers in the world.

Since entering this business in 1980 it has sold more than 3,700 units, from 250 KW to 2.4 MW in scale.

Toshiba Corporation (TOSBK.PK) in May 2011 announced a new alliance with South Korean wind power equipment manufacturer Unison Company to jointly develop and market advanced new wind energy infrastructure.

Itochu Corporation (ITOCY.PK) in May 2010 signed an agreement with General Electric, under which the two corporations will jointly participate in large-scale renewable energy projects.

Later in the year they took a stake in the 152 MW CPV Keenan II wind power project in Oklahoma.

This was followed in April 2011 with an announcement that Itochu subsidiary Tyr Energy will join Google, Sumitomo Corporation, General Electric and Caithness Energy in the $2 billion development of a massive 845 MW wind farm – touted as the world’s largest – at Shepherds Flat in Oregon.

* Learn more on the attractions of Japanese renewable energy in the ebook Investing in Japanese Renewable Energy.

June 10th, 2011

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