Japan's offshore wind market finally looks set to take off over the next few years, potentially acting as a springboard for floating wind around the world.
Japan has the world's most generous incentive for offshore wind, according to the Global Wind Energy Council (GWEC): a feed-in tariff worth ¥36,000 (equivalent to $335 today) per megawatt-hour of power. So far, however, that support has failed to stimulate the market.
Although Japan's first offshore wind pilot projects date back to 2003, the country had just 66 megawatts of capacity in the water at the end of 2019.
Several factors have held the market back. Despite the obvious appeal of offshore wind for an island nation, Japan's deep waters mean that the market will center on floating turbines, a technology still in its infancy.
Until recently, seabed occupation rights were issued at the discretion of the mayor of the local prefecture. This meant they could be revoked every three or four years, following an election. “This is a huge business risk,” Yoshinori Ueda, general manager of the Japan Wind Power Association (JWPA), said in an email.
Meanwhile, Japan's lengthy and expensive environmental impact assessment process has left nearly 15 gigawatts of offshore wind projects stuck in the permitting queue as of January 2020, GWEC estimates.
First big offshore project to begin construction in 2021
But the market finally appears ready to turn a corner, observers say, despite the COVID-19 crisis having delayed the country's first offshore wind auction by a few months.
The upcoming auction will focus on the first of four offshore wind "promotion zones" scheduled for priority treatment. Based on the draft guidelines for the auction, a winning floating project off Gotō in Nagasaki of at least 16.8 megawatts in size will automatically qualify for the feed-in tariff according to a briefing note from law firm Orrick, Herrington & Sutcliffe.
The Gotō priority zone comes with a 20-year seabed lease and an environmental impact assessment in order, JWPA's Ueda said.
"It's fair to say that offshore wind is ready to take off in Japan in 2020, at least from the policy point of view," said Feng Zhao, strategy director at GWEC.
Meanwhile, the country's first large-scale project will soon begin moving into the water. In 2021, Marubeni-backed developer Akita Offshore Wind will begin installing the foundations for a 139-megawatt plant in waters off the Akita prefecture on Japan’s northeast coast. Partners on the project include Kansai Electric Power and Chubu Electric.
Onshore substation and transmission line construction kicked off this February, and Zhao said the ¥100 billion ($932 million) plant “is expected to be the first utility-scale offshore wind project to be built in Japan when it commissions in 2022.”
Large utility-scale projects, defined as having more than 400 megawatts of capacity per project, likely won’t come online until mid-decade, Zhao added.
Fixed-foundation plants such as Akita Noshiro are expected to be the exception rather than the norm in Japan, with floating turbines to dominate in the years ahead.
Japan currently has 19 megawatts installed across five floating turbines. GWEC recently joined forces with the JWPA to launch an offshore wind task force to accelerate the market's development.
A possible future for Japanese wave and tidal energy
In addition to offshore wind, Japan is looking to exploit its coastline for other forms of renewable energy.
Following pilot wave and tidal projects by Ocean Power Technologies and IHI in 2017, Kyuden Mirai Energy is due to install a 500-kilowatt Simec Atlantis tidal turbine off Naru Island, Gotō, later this year. Meanwhile, the Okinawa Institute of Science and Technology has a wave-powered generator in the works.
“Following the Fukushima [Dai-ichi nuclear disaster], Japan has been seeking to diversify its energy mix,” said Amy Parsons, communications and events director at industry body Ocean Energy Europe. “Beyond Japan's significant resource, its competitive shipyards and ports offer good development perspectives for the ocean energy sector."