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Japanese Industrial Conglomerates follow Korean Shipbuilders into Offshore Wind Energy

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Investment in Offshore Wind Energy

The growth potential in offshore wind energy has attracted a large number of top global industrial conglomerates despite the industry not living upto its potential. Offshore wind energy is facing a mounting number of problems like logistics, high cost and project delays. However this has not deterred companies from making billion dollars investment into offshore wind energy. The reason is that offshore wind energy is seen as the growth driver of a maturing wind equipment manufacturing industry. Top global wind turbine makers are seeing revenue shrink and losses increase as demand tapers off and competition keeps on increasing. Offshore wind energy is seen as a niche where commoditization can be avoided.

Japanese companies like Toshiba, Hitachi are planning to build offshore wind turbines as the Japanese Government offers support for building offshore wind farms off the coast of Japan. Note the Japanese wind industry is non-existent as Japan has very few wind farms and there is no Japanese manufacturer in the global top 15 wind turbine company list. Mitsubishi is the only major wind turbine player and it has been facing patent problems with GE. Last year, South Korean shipbuilders like Hyudnai, Daewoo and Samsung Heavy entered the industry wanting to diversify from the shipbuilding industry which is seeing a glut.

Why are Shipbuilders Rushing into the Wind Energy Sector

Korean Shipbuilders are facing the twin problems of increased competition from Chinese companies as well as a global glut in Ship Supply. They are looking to diversify away from the ship building industry into newer faster areas of growth. Wind Energy has been growing at above 20% CAGR over the last several years and makes a good area to invest in. Daewoo Shipping has bought a small firm in the USA DeWind to acquire Wind Turbine Technology while Hyundai has already made plans to open Wind Farms. With similar skills required in Offshore Wind Farms and Shipbuilding, Daewoo Shipping has set a target of $800 million from Wind Energy by 2012. Samsung Heavy the second largest Korean shipbuilder after Hyundai Heavy has started producing 2.5 MW Turbines from a  500 MW Plant  in Geoje Island in South Korea.

Here is a List of Offshore Wind Energy Companies.


Toshiba Corp, Hitachi Zosen Corp , JFE Steel Corp and three other companies plan to invest 120 billion yen ($1.53 billion) over a decade to set up offshore wind turbines, the Nikkei reported.

Potential sites for the project, which will have a production capacity of 300,000 kilowatts, include areas off the coast of the Kyushu region in southern Japan, the newspaper said.

Sumitomo Electric Industries Ltd, Toa Corp and Toyo Construction Co Ltd are the other companies, the Japanese business daily said.

Funds will be raised through a special-purpose company and project financing, the Nikkei said.

Japan hopes to begin building commercial offshore wind farms, following in the footsteps of Europe, especially world leader Britain.

The Japanese environment ministry has estimated the country can eventually build 1,600 gigawatts of offshore wind power capacity.


Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to

One Response so far | Have Your Say!

  1. Gapal

    earlier.The really innsae thing is, we already know that alternative or green energy isn’t working. We’ve seen it in the UK in the winter of 2010/2011. The windfarms produced nothing and the UK had to buy power from France. If the weather says no , then we’re screwed. Sure, we can build backup systems, but those have to run all the time as well, since you can’t just start them up like the light in ones home. Plus we’d need massive upgrades in our power grids to run this, upgrades we don’t have.It’s funny though, I mean, we’re being told to stop wasting electricity by our so called leaders and activists , but at the same time we’re told to buy electric vehicles. Errrr Okay?I’ve been pretty much saying this for a few years now. Heck, I’ve been telling Americans to get out of Europe while they still can, because what’s going to come won’t be pretty. That said, I think the US should also remove the troops from the EU. You don’t want your boys to be here when this ship finally sinks. You don’t want to get dragged into this.