Sumitomo whirls into US wind power market with Texas investment

Sumitomo Corp, one of Japan's largest conglomerates, has entered the US wind power market with the acquisition of a 42.5 per cent stake in a 120MW Texas wind farm, and signalled that more deals could be on the way.

The Tokyo-based company announced its investment in Stanton Wind Energy last week, without disclosing the purchase price. However, Japan’s Nikkei newspaper yesterday reported that Sumitomo paid an estimated 5bn yen to 10bn yen ($52.5m to $105m) for the stake.

Sumitomo acquired the shareholding from an investment arm of financially troubled insurer American International Group (AIG). General Electric Co holds a 42.5 per cent stake in the Stanton wind project, with the remaining 15 per cent owned by US wind farm operator Invenergy.

General Electric supplied 80 1.5MW wind turbines to the Stanton project, which has been in operation since February 2008. The US company has invested in – and provided equipment to – at least six Texas wind projects.

Sumitomo noted that the US renewable energy sector is expected to grow under the Obama administration's US$100bn clean tech stimulus package.

"Among all other renewable energy sources, the [US] wind power market is expected to have the most growth potential," said Sumitomo in a statement, adding that it plans to make further investments in North America's wind energy sector.

Oil-rich Texas leads US states in wind power with 7.9GW of installed capacity. The growth has been fuelled by investments from foreign companies, which own about two-thirds of new and upcoming wind projects in the state.