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Goldman Sachs Moves into Biomass Development in Japan

  • Publish Date: Posted about 7 years ago

Goldman Sachs is seeking a strategic expansion into the renewable energy market by building biomass plants in Japan. The news was announced in Nikkei Asian Review.

The move will happen through one of the giant's directly owned companies, Japan Renewable Energy, which was set up by Goldman Sachs to build solar energy facilities. It plans to now build ten new biomass developments across a series of locations in Japan over the next three years. The expected investment will be 40 billion yen, and the total output capacity of the new plants will be as much as 70,000 Kw.

The article in the Nikkei Asian Review suggests that the firm's move into the biomass sector is being driven by falling margins across its primary business areas. The main issue is the drop in wind and solar energy tariffs, which have plummeted by nearly a half in the past five years. This has greatly effected profitability for renewable energy players that build wind and solar developments.

The first biomass plant will begin construction this month in Kamisu on a former industrial site. It is expected to begin operation in 2019 with 24,00 Kw of generation capacity. The facility will use woodchips from sustainable sources as its fuel.

Biomass has been chosen as a strategic renewable energy fuel by the Japanese government because it is less weather-dependent than solar and wind. The government is keen to grow its investment in biomass by 300pc against 2014 figures, with an ambitious build programme that will run until 2030 with a mix of public and private investment in the sector.

Biomass is considered sustainable because it can use waste products such as solid waste, agricultural waste, paper milling chips and ethanol to create power.