Australasia's home for timber news and information

Sumitomo Forestry adds more alternative power


Sumitomo Forestry plans to add wind and geothermal power to its renewable energy portfolio and expand its biomass business over the next three years, bringing around five new plants online in Japan and abroad. Source: Nikkei Asian Review

The Tokyo-based forest manager and lumber producer plans to put around 20 billion yen (US$181 million) — more than 10% of planned investment — into growing renewables operations in that time.

It will buy a nearly 10% stake in Renova, a Japanese environmental technology startup with a track record in biomass and solar power plant development, for 1 billion yen when new shares are issued.

Sumitomo Forestry plans to collaborate with Renova on wind and geothermal power operations, fields both are taking steps to break into.

Sumitomo Forestry already has one foot in the biomass power business, letting it put trees removed during forest thinning and waste from lumber and home Prefecture, is already in operation.

Two plants in Hokkaido are to go online within the year, while one in Aomori Prefecture will launch in 2017.

Over the next three years, Sumitomo Forestry plans to break ground on one or two wind power plants, and aims to bring a geothermal plant into commercial operation.

Sites under consideration for these facilities include portions of the roughly 46,000 hectares of forestland the company owns across Japan.

One new wind farm is expected to cost 10 billion yen or more and would be among the highest capacity of its kind in Japan at around 30,000kW to 60,000kW.

The geothermal plant is seen with a capacity of around 2,000kW and a cost of several billion yen.

Power will be sold under Japan’s feed-in tariff system, wherein utilities buy electricity produced by alternative means at government mandated prices.

Sumitomo Forestry also aims to put another biomass plant or two into operation in Japan in the near future, and take this business overseas within two years.

Indonesia will be the focus of those efforts, given its established renewable power purchase framework and the fact that the company owns forestland there.

The company’s biomass plants, including those under construction, have a total production capacity on the order of 100,000kW.

The planned projects are seen doubling Sumitomo Forestry’s total renewable energy capacity to 200,000kW in three years.

Solar power has come to dominate Japan’s renewable energy sector. But a falling mandated purchase price for electricity from that source has led to a decline in applications to build such facilities, and a shift in focus to anticipated growth fields such as wind and geothermal power.

National wind power capacity is seen rising to 10 million kilowatts, 3.7 times the fiscal 2013 level, by fiscal 2030, while geothermal capacity could as much as triple to 1.55 million kilowatts, according to Japan’s Agency for Natural Resources and Energy.

A number of major Japanese companies are breaking into alternative energy fields or bulking up their presence there.

Mitsubishi Corp. aims to begin wind power production in Akita Prefecture by fiscal 2019.

Marubeni and general contractor Obayashi are preparing to build wind farms off the coast there.

Companies including Mitsubishi and Kyushu Electric Power are exploring potential geothermal operations in Kumamoto Prefecture.