Hitachi Zosen Corp., an industrial machinery maker, is leading a group including Toshiba Corp. and JFE Holdings Inc. that plans to build 120 billion yen ($1.5 billion) of offshore wind farms in Japan.

The seven-member group will complete 7.5 megawatts of pilot plants by 2016 before building the wind farms with a combined capacity of 300 megawatts over 10 years, Tomomitsu Yamamoto, Hitachi Zosen’s Tokyo-based spokesman, said today by telephone.

Last year’s Fukushima disaster caused by an earthquake and tsunami prompted the government to reduce reliance on nuclear energy in favor of natural gas and renewable sources. Japanese power utilities are obliged to buy electricity from solar and wind projects at above-market rates.

The Japan Weather Association, Sumitomo Electric Industries Ltd., Toa Corp. and Toyo Construction Co. are other members of the group, Hitachi Zosen said today in a statement on its website. The group may form a special purpose company and seek funds for the project, according to the statement.

Japan’s government introduced incentives in July to promote investments in clean energy. The program’s feed-in tariff for wind is 23.1 yen per kilowatt-hour for 20 years, almost double the market rate for industrial users.

The Nikkei newspaper today reported the offshore wind power project, without saying where it obtained the information.

Hitachi Zosen rose as much as 3.5 percent and gained 1.2 percent to 88 yen as of 12:35 p.m. in Tokyo. JFE Holdings climbed 2.4 percent to 1,008 yen. Toshiba was unchanged at 249 yen.

Copyright 2012 Bloomberg

Lead image: Offshore wind via Shuttstock