Japan’s offshore wind industry is gaining momentum as foreign energy corporations increase their investments and workforce. Thanks to new public tenders and government support, the sector is poised for growth, profitability issues and infrastructure issues remain major obstacles.
Following the final of two public tenders for large-scale offshore wind projects, the Japanese government has settled on the developers of seven offshore spaces with a combined capacity of 3,500 or 3. 5 gigawatts. By 2040, the Ministry of Economy, Trade and Industry plans to put in place an offshore wind capacity of up to forty-five GW.
According to Nikkei Asia, in 2020, Tokyo developed a strategy to position Japan as the world’s third largest manufacturer of offshore wind energy until 2040, after China and Europe.
A revised Japanese law on the use of renewable marine energy resources is also gaining momentum. The country’s exclusive economic zone could simply extend beyond territorial waters to encircle spaces suitable for development.
Japan’s territorial waters and the EEZ combined, the sixth largest in the world, cover 4. 5 million square kilometers. The country’s market is expected to grow further after the finishing touch of floating wind turbine technology.
The Japanese base of the German company RWE plans to increase its workforce to 100 workers this year. It will essentially hire staff from Japan and other parts of Asia to assist in the development and exploitation of offshore wind.
RWE’s total offshore wind capacity is 3. 3 gigawatts. In collaboration with the trading company Mitsui
Iberdrola, a Spanish company, also has plans to expand in Japan. In 2020, the company acquired Acacia Renewables, a renewable energy developer, to enter the Japanese market. In the second tender circular, the company, along with Tohoku Electric Power and a subsidiary of oil giant Eneos Holdings, won the tender for the waters off Akita Prefecture in the northern region of the country.
“We need to distribute roles with the corporations with which we are going to co-develop and combine the mandatory staff,” said Chikako Nakayama, chairman of Iberdrola’s Japanese subsidiary.
The offshore wind industry in Japan can gain advantages from the presence of foreign corporations. From progression to operation and dismantling, offshore corporations have a cycle that exceeds 20 years. They require the acquisition and manufacturing of portions, as well as the provision of a body of maintenance work in the vicinity of progression sites.
The assistance and expertise of foreign corporations will facilitate the status quo of locally sourced networks, and with it the speed and stability of business growth.
Wind turbine brands also need to expand their operations in Japan. Vestas, a Danish company, will collaborate with Japanese corporations to procure wind turbine towers and nacelle components. Michael Balvers, senior vice president, said he was confident Japanese suppliers would also export to overseas markets.
However, the Japanese offshore wind market continues to face obstacles, especially in terms of profitability. Large-scale progression and load alleviation are challenging in Japan due to the country’s limited coastal spaces compared to Europe and other regions.
Sourcing spare parts from Japan is challenging, and maintenance costs are high due to the withdrawal of domestic manufacturers, such as Mitsubishi Heavy Industries and Hitachi, from wind turbine production.
Taiwan, a pioneer in offshore wind, has noticed a decline in profitability due to high resource consumption and strict domestic production standards. This has led to the withdrawal of foreign corporations and delays in development.
Orsted, a Danish renewable energy company, and Northland Power, a Canadian renewable energy company, recently announced that they would reduce their participation in Japan’s development.
“Efforts to advance risks, such as deregulation and inadequate transmission capacity, are essential,” said Mika Ohbayashi, director of the Japan Institute of Renewable Energy.
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