Irish green energy business Mainstream Renewable Power has pulled out of a Japanese wind project after just one year, it has emerged.
The news comes as its biggest shareholder, Norway’s Aker Horizons, prepares to publish financial results for the first three months of the year later this week.
Mainstream took a stake in US-based multinational developer Progression Energy’s proposed 800 mega watt (MW) floating offshore wind project in Japan in March 2022. However, the company confirmed at the weekend that it has pulled out of the project following a review of its businesses.
“The Japanese market, where the company was exploring early-stage opportunities, is an attractive long-term offshore wind market, but currently we are prioritising our more advanced offshore projects and opportunities across Asia and in European waters,” a statement from the company said.
Mainstream described the Japanese project as a “well-formed early-stage development opportunity” on an ideal site close to good electricity grid connections, when it originally announced the investment.
Japan is expected to be one of the world’s biggest offshore electricity markets. One of the country’s largest banks, Mitsui, owns about 25 per cent of Mainstream alongside Aker which has 58.4 per cent and investors including the Irish group’s founder, Eddie O’Connor.
Separately, Mainstream has yet to secure deals to sell the electricity generated by planned wind farms in South Africa that will have total capacity to produce 827MW of power.
Such contracts, known as power purchase agreements, are secured through auctions run by the state that favour the lowest bids.
Mainstream also has agreements for proposed solar farms that will generate 450MW with South African state company, Eskom.
The Irish company said it was in talks about possible industrial power purchase agreements with industrial customers in the country. Mainstream added that it continued to be “positive” about South Africa which has severe power shortages but “excellent renewable energy resources”.
The business, led by chief executive, Mary Quaney, lost €630 million last year, according to Aker’s annual report, which was published earlier this month.
That included a €370 million loss in a key market, Chile, where Mainstream won contracts in 2016 to build solar and wind farms with a total capacity of 1,350MW at a cost of €1.64 billion.
Aker blamed challenging conditions in the Chilean market that it said had forced other companies to tell the country’s national electricity operator that they could no longer fulfil the terms of their power purchase contracts. Despite these challenges, Mainstream pointed out that it had 1,100MW of wind and solar farms fully operational in Chile.
Elsewhere the company expects to make $90 million (€82 million) in proceeds from the planned sale of wind farms across Africa – dubbed Lekela Power – to Infinity Group and Africa Finance Corporation.
[ ‘Ireland’s wind resources are the best we see anywhere in the world’Opens in new window ]
Mainstream and its partner Actis announced the deal in July last year. Developed by a consortium called Mainstream Renewable Power Africa Holdings, Lekela includes operating and planned wind farms in Egypt, Senegal, Ghana and South Africa.
With businesses in Europe, Africa, the Americas and Asia, Mainstreams aid that it was continuing to work on projects in Scotland, Scandinavia and elsewhere.
