Japan-based power company, JERA has announced its membership to the World Forum Offshore Wind (WFO) and its Floating Offshore Wind Committee (FOWC).
6/9/2021 7:49:00 AM

Japan-based power company, JERA has announced its membership to the World Forum Offshore Wind (WFO) and its Floating Offshore Wind Committee (FOWC).

21.  Japan’s First Commercial Offshore Wind Project with a Capacity of 140MW Is Set to Enter Operation in 2022

Japan is an island country where the terrain is mostly rugged and most of the population is densely settled along the coastlines. Since around 70% of Japan is mountainous, developing renewable energies there can be very challenging due to the lack of flat and unoccupied land for large-scale wind and solar projects. Indeed, local project developers tend to have little choice but to select sites in the mountains or the seas. Nevertheless, the Japanese government is proactively diversifying its energy mix and has introduced many related initiatives. The country now has many offshore wind farms in the pipeline, with the first commercial-scale project anticipated to enter operation in 2022.

Japan has sped up the adoption of renewable energies in the recent years and passed several legislations that established generation targets. On July 3, 2018, the Japanese government unveiled “the Fifth Strategic Energy Plan” that calls for expanding the share of renewables in the country’s energy mix from 16% at the time to 22-24% by 2030. In the target year, the contributions of hydro, solar, biomass, wind, and geothermal energies to the domestic electricity generation should come to 9.2%, 7%, 4.6%, 1.7%, and 1.1% respectively.

Regarding wind power, the 2030 target translates to a cumulative generation capacity of 10GW. Since Japan is densely populated and has a complex topography, erecting an array of wind turbines in any part of the country will be a difficult, if not impossible, task. Hence, the Japanese government has decided to channel much of the resources for the development of the domestic wind market to offshore wind farms. Following the launching of the Fifth Strategic Energy Plan, Japan’s parliament in the November of the same year passed “the Act for the Promotion of the Use of Marine Areas for the Development of Marine Renewable Energy Generation Facilities.” The act enables the government to parcel out areas along the country’s coastlines for wind farm tenders. The lease term for these designated sites can be extended to a maximum of 30 years. The act also established a new government agency that will create and enforce a standard for the operation and management of offshore wind farms.

The Japanese government formally announced 11 sites designated for wind power auctions in July last year (2019). These locations were selected because of their strong development potential. The first round of wind power auctions is scheduled for the second half of this year (2020). Kato Jin, president of Japan Wind Association, said that 20-30 organizations have signed up to compete for the upcoming tenders. Kato also declared that 2020 will be “a turning point” in the development of Japan’s offshore wind sector.

The 11 chosen sites are off the coasts of the following prefectures: Akita, Aomori, Chiba, Nagasaki, and Niigata. Eager to get into the action, dozens of entities that will be bidding in the first-round auctions have already begun geological surveys at four sites that have been prioritized by the government.

Akita is expected to be first among the coastal prefectures to accommodate a commercial-scale offshore wind project. Marubeni, a major Japanese conglomerate, is currently preparing to initiate the construction of 33 wind turbines in the waters next to the Port of Akita and the Port of Noshiro (which is also in the same prefecture). The turbines will be supplied by MHI Vestas, a joint venture between Mitsubishi Heavy Industries and Vestas Wind Systems. The planned generation capacity of the Akita-Noshiro project, which is being developed through a subsidiary called Akita Offshore Wind, reaches 140MW. The project is scheduled to enter operation at the end of 2022 and will supply power to as many as 47,000 homes in the region.

The funding of the Akita-Noshiro project has also brought together many domestic and foreign financial institutions. The lead arranger of the loan agreement were MUFG Bank, Mizuho Bank, and Sumitomo Mitsui Banking. The senior lenders include SG CIB. Daniel Mallo, managing director and head of natural resources and infrastructure for Asia Pacific at SG CIB, said that the Akita-Noshiro project serves as an excellent template for the funding of offshore wind farms and represents a big step forward for Japan’s offshore wind sector.

While the Akita-Noshiro project is set to be Japan’s first commercial-scale offshore wind project, the country’s largest electricity supplier TEPCO and domestic financial services group ORIX are also working on their respective offshore wind projects located in the waters around Chiba Prefecture (near the city of Chosi). The generation capacity of TEPCO’s wind farm is planned at 370MW, and that of ORIX’s wind farm is expected to reach 200MW. Both projects are scheduled to enter operation in 2025.

TEPCO has also teamed up with several organizations, including domestic renewable firm RENOVA, to build one of the largest offshore wind projects in Japan. This particular project, which will have a capacity of 700MW, is located off the coast of Akita Prefecture as well. Currently, no other offshore wind farm under development in Japan can match its scale.

Japan’s offshore wind sector is anticipated to experience accelerating growth in the future because of the support from the government as well as the entry of foreign investors and project developers. This March, TEPCO and Denmark’s Ørsted, which has been a leader in the sector, formally agreed to establish Choshi Offshore Wind Farm KK. This joint venture will be submitting proposals for wind farms in the designated sites along the shores of Chiba Prefecture.

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