Prime Minister's Trip to Japan Brings Good News for U.K. Power Industry

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Researched by Industrial Info Resources Europe (Galway, Ireland)--On the first official visit to Japan by British Prime Minister David Cameron, important announcements were made that will have a positive effect on the U.K. power industry.

The first was the signing of a deal with Japan's state-backed Japanese Bank for International Co-operation (JBIC) (Tokyo) to fund U.K. infrastructure projects, with the majority of the money going to offshore wind development. The memorandum of understanding is the first of its kind since Japan broadened JBIC's mandate to allow it to invest in developed countries and emerging economies. Japanese firms have been stepping up their offshore investments in the U.K. since last September, when Japanese trading house Marubeni Corporation (TYO:8002) (Tokyo) acquired a 49.9% stake in the Gunfleet Sands windfarm in the Thames Estuary. In December, Mitsubishi Corporation (TYO:7011) (Tokyo) bought a 50% stake in the offshore transmission line connecting Walney 1. Marubeni returned to the market in March, buying U.K. offshore installation specialist Seajacks in conjunction with a private-equity group backed by the Japanese government.

The prime minister also announced an agreement that opens Britain's nuclear market up to Japanese companies' technical expertise in plant design and construction. This bodes well for the AP1000 reactor design from Westinghouse (Monroeville, Pennsylvania), a subsidiary of Toshiba Corporation (OTC:TOSBF) (Tokyo), which is one of two designs at the licensing stage for the U.K. nuclear new build projects. In return, British companies will be called upon to help clean-up the Fukushima plant in the wake of last year's earthquake and tsunami.

"British companies have significant expertise in nuclear decommissioning and clean-up, with 19 nuclear sites in the U.K. currently being managed through the process," Cameron told reporters.

Mitsubishi used Cameron's visit to bring forward the announcement that it will invest more than £80 million ($128 million) in an engineering facility in Edinburgh, which will develop a new type of generator for wind turbines. The Edinburgh investment will lead to the creation of more than 100 new jobs, with more expected in the supply chain. Mr Cameron said Mitsubishi's decision was "a huge boost" to the Scottish economy and a vote of confidence in the U.K.'s research and development sector.

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