Japan Offshore Wind Development

Introduction

According to the Intended Nationally Determined Contributions (INDC) Japan submitted to UNFCCC in October 2021, the country aims to reduce its greenhouse gas emissions by 46% in the fiscal year 2030 from its fiscal year 2013 levels, which equals to reducing and removing 760 Million t-CO2 of Greenhouse gas emissions. Japan continues to set the goal of cutting its emission by 50% and be aligned with the long-term goal of achieving net zero by 2050.

Japan is in the midst of its energy transition. While fossil fuel-based electricity supply has fallen by approximately 1.9% each year while renewable energy (wind, solar, hydropower) has increased annually for ten years straight. In that same period, carbon dioxide emissions have decreased by 22.5%.

Current System Description

Current Power Capacity Mix

Japan's peak energy demand averaged 161,820 MW in FY2023 and is predicted to grow to 162,200 MW in FY2024. Nationwide demand peaks in summer months. Operating capacity by generation type is summarized in the table below:

Japan's Electricity Generation by Energy Type in 2022 (measured in terawatt-hours, TWh)

Electricity generation in Japan from 2010 through 2022. Data from the FY2022 Energy Supply and Demand Report.

Energy Source	Generation (TWh)
Nuclear	561
Coal	3,106
Natural Gas	3,402
Oil	825
Hydropower	769
Solar	926
Wind	93
Geothermal	30
Biomass	371

Excitingly, Akita Port (Tohoku) offshore wind farm, the first commercial offshore wind farm with awarded FIT in Japan, started operation in January 2023 under the FIT system.

Prospective Power Capacity

The energy demand from the electricity sector in 2030 is expected to be over 350GW, and the add-up of solar and wind is expected to contain over one-third of the share. Through 2032, approximately 27,448 MW of new generation capacity is expected to come online. Prospective power capacity is summarized in the table below:

Generation type	Capacity added by 2032 (MW)	Total capacity in 2032 (MW)
Conventional hydropower	516	21,970
Coal	1,800	50,940
Liquefied natural gas	6,237	81,990
Oil and Others	30	17,670
Nuclear	10,180	33,080
Wind	3,515	17,800
Solar	3,773	97,070
Geothermal	75	550
Bioenergy	1,220	6,560
Waste	46	900
Battery Storage	55	230

Predicted installed capacities in Japan, 2022-2032. Data from the Organization for Cross-regional Coordination of Transmission Operators.

Renewable Targets

Japan's Offshore Wind Target is listed in the Sixth Strategic Energy Plan. It has announced a target to reach 5.7GW of offshore wind in operation by the end of FY2030.

• Another industrial assessment report, The Vision for Offshore Wind Industry, 1st Edition, is expected to award approximately 10GW of capacity in the pipeline for offshore wind by 2030, 30-45GW by 2040. The cost reduction target is expected to be 8-9 yen/kwh by 2030-2035.

Vision for Offshore Wind Power Industry（1st）December 15, 2020, Public-Private Council on Enhancement of Industrial Competitiveness for Offshore Wind Power Generation

• The Vision for Offshore Wind Power Industry Report presented the 2030 and 2040 project timeline targets for nine prefectures. According to the report, the local 2030 targets are "based on projects that are undergoing environmental assessment"; the local 2040 targets are based on LCOE (Levelized Cost of Energy) and other data from the NEDO Report on the Support Project for the Development of Floating Wind Farms (Study of Offshore Wind Power Generation Costs), with reviews from experts and power producers. The potential of floating offshore wind in each prefecture was not included in the target capacity.

In the energy mix for 2030, the goal is to utilize renewable energy to contribute 330 to 350 billion kWh. JAPAN'S ENERGY, METI FEB 2023

The first floating offshore wind will be built at Goto City in Nagasaki Prefecture by a consortium of six companies led by Toda Corporation selected in June 2021

Beyond these government targets, non-governmental organizations operating in Japan have outlined interim targets needed to reach long-term goals. For example, the Renewable Energy Institute argues that 25 GW of fixed bottom and 20 GW of floating offshore wind needs to come online by 2035 to achieve a 65% carbon reduction by 2035, whereas the Japan Wind Power Association claims that 40 GW of fixed bottom and 60 GW of floating is needed by 2050.

Offshore Wind Potential

Asia: The Next Frontier for the Offshore Wind Industry. Asia Wind Energy Association, 2018

From the research in 2018, the prefectures with the highest offshore wind potentials are Hokkaido, Tohoku, and Shikoku. The potential capacity in Hokkaido, which is over 200GW, is higher than the add-up of the latter two regions.

According to the official institution in Japan, NEDO, the potential of hard mount base offshore wind is 128 GW, and the floating offshore wind potential is 424GW in the country.

Major Renewable Projects

Operating Projects

秋田県秋田港及び能代港における洋上風力発電プロジェクトの全面商業運転開始について, Marubeni 丸紅株式会社, Jan-31-2023,

Operating Projects	Japanese Name	Capacity	Status
Akita Port (Tohoku) offshore wind farm(Another name:Akita Noshiro Offshore wind farm)	秋田洋上風力発電株式会社/秋田港と能代港洋上風力発電: 秋田港洋上風力発電所 Akita Port (Marubeni) Offshore wind farm(54.6MW) 能代港洋上風力発電所 Noshiro City (Marubeni) Offshore wind farm(84MW)	140MW	Operating
Kamis Offshore wind farm	ウィンド・パワーかみす第１洋上風力発電所(14MW) ウィンド・パワーかみす第２洋上風力発電所(16MW)	30MW	Operating
Sakata North Port (Nearshore) Offshore wind farm	酒田風力発電事業	16MW	Operating(Another 28MW in pre-construction stage)

Promoting & Promosing & Upcoming Areas

The developing area for Japanese offshore wind is divided into three categories: Promoting Area 促進区域, Promising Area 有望な区域, Upcoming Area 準備区域 depends on its progress of the investigation of potential capacity, stakeholders' negotiation, assessment, infrastructure, and natural and social conditions.

The latest update by the Japanese government is on May 12th, 2023, and the designated areas are as the list below and the map:

Promoting, promising, upcoming area of Japanese offshore wind 促進区域、有望な区域等の指定・整理状況, Natural Resources and Energy 経済産業省 資源エネルギー庁, Update in May 23, 2023

* Promoting Area 促進区域 * Auction Completed 事業者選定済

Area (Japanese)	Project	Capacity	Details	Status
①長崎県五島市沖（浮体）	Goto City (Chubu Electric Power) Offshore Floating wind farm	17MW	2.1MW×8	Construction. Operate by 2024
②秋田県能代市・三種町・男鹿市沖Noshiro-Mitane-Oga Offshore wind farm	Noshiro City (C-TECH) Offshore wind farm	479MW	12.6MW×38	Pre-construction. Operate by 2028
③秋田県由利本荘市沖	Yurihonjo (Mitsubishi) Offshore wind farm	819MW	12.6MW×65	Pre-construction. Operate by 2030
④千葉県銚子市沖	Choshi Offshore wind farm	391MW	12.6MW×31	Pre-construction. Operate by 2028

• Not selected in the bidding process: Other projects were under bidding process for ②秋田県能代市・三種町・男鹿市沖Noshiro-Mitane-Oga Offshore wind farm:Noshiro-Mitane-Oga Offshore wind farm, Akita Port (JWD) Offshore wind farm, Northern Akita Offshore Wind. Project for ③秋田県由利本荘市沖 was Yurihonjo (Renova) Offshore wind farm

* Promoting Area 促進区域 * Auction in progress 事業者公募中

• ⑤秋田県八峰町能代市沖

Happou Noshiro (JERA) offshore wind farm, Happou Noshiro (JRE) Offshore wind farm, Happou Noshiro (RWE) offshore wind farm, Happou Noshiro (TEPCO) Offshore wind farm, Happou Noshiro (Tohoku Electric Power) Offshore wind farm, Noshiro City (Mitsubishi) Offshore wind farm, Noshiro City (JRE) Offshore wind farm,

Noshiro City (Mitsubishi) Offshore wind farm was in the process but canceled in December 2022

• ⑥長崎県西海市江島沖

Saikai-Enoshima Offshore wind farm, West Offshore Wind Power Generation Project

• ⑦秋田県男鹿市・潟上市・秋田市沖

Katagami-Oga-Akita Offshore wind farm

• ⑧新潟県村上市・胎内市沖

Tainai City, Niigata Prefecture And Murakami City Offshore wind farm, Niigata (Flotation Energy) offshore wind farm, Murakami City Tainai City Offshore wind farm, Niigata (Invenergy) offshore wind farm, Northern Niigata Offshore wind farm, Toki Floating wind farm

* Promising Area 有望区域

• ⑨北海道石狩市沖

Ishikari Bay - IBOWPG Offshore wind farm, Ishikari Bay (JERA) Offshore wind farm, Ishikari Bay (JRE) Offshore wind farm, Ishikari Bay (JWD) offshore wind farm, Ishikari Bay (OWF) offshore wind farm, Ishikari City Coastal offshore wind power project, Ishikari Bay (Nippon Steel) offshore wind farm, Ishikari Bay New Port offshore wind farm, Hokkaido Ishikari Bay Offshore wind farm

• ⑩北海道岩宇・ 南後志地区沖
• ⑪北海道島牧沖
• ⑫北海道檜山沖
• ⑬北海道松前沖
• ⑭青森県沖日本海（北側)

Aomori Offshore wind farm, Seihoku-Oki Offshore wind farm

• ⑮青森県沖日本海（南側)

Aomori (South Side) Offshore wind farm, Tsugaru (RWE) Offshore wind farm, Tsugaru Ajigasawa offshore wind farm, Ajigasawa Offshore wind farm, Tsugaru (GPI) Offshore wind farm, Tsugaru (JERA) Offshore wind farm, Tsugaru (JWD) Offshore wind farm

• ⑯山形県遊佐町沖

Yamagata Prefecture Yuza Offshore wind farm, Yamagata Yuza Town Offshore Wind Power Project_Invenergy Wind Llc, Yuza (ITOCHU) offshore wind farm, Yuza (JWD) offshore wind farm, Yuzau Town (Marubeni) Offshore wind farm , Yuzau Town (TEPCO) Offshore wind farm

• ⑰千葉県九十九里沖
• ⑱千葉県いすみ市沖

Isumi City (Chiba) offshore wind power project, Isumi City (Green Power) offshore wind farm, Isumi City (RENOVA) offshore wind farm, Isumi City offshore wind power project

* Upcoming Area 準備区域

• ⑲青森県陸奥湾
• ㉒福井県あわら沖

Fukui Offshore wind farm

• ⑳岩手県久慈市沖(浮体)

Hirono Offshore wind farm

• ㉓福岡県響灘沖

Kitakyushu Hibikinada Offshore wind farm

• ㉑富山県東部沖 (着床･浮体)
• ㉔佐賀県唐津市沖

Karatsu City (KEPCO) offshore wind farm, Karatsu City (RENOVA) offshore wind farm, Karatsu Offshore wind farm, Saga Karatsu City (Iberdola Renewable Japan) Offshore wind farm, Saga Karatsu City (Vena Energy) Offshore wind farm

Projects of Unclear bidding status

Japan Offshore Wind Prospective Projects

Project	Capacity	Status
Aker offshore wind farm	800MW	Announced
Satsuma Offshore wind farm 鹿児島薩摩洋上風力発電事業	600MW	Announced
Enshunada Offshore wind farm遠州灘洋上風力発電	500MW	Pre-construction
Kagoshima Offshore wind farm 鹿児島県における洋上風力発電	1,500MW	Announced
Kashima Port Offshore wind farm 鹿島港洋上風力発電事業	181MW	Pre-construction
Sakura Offshore Floating wind farm千葉佐倉洋上風力	520MW	Announced
Hiyama Area Offshore wind farm秋田県潟上市	722MW	Announced
Fukushima Demo floating wind farm	30MW	Pre-construction

All projects that are under the assessment process can be found on the official webpage of the Ministry of Economy, Trade, and Industry - Wind Power Projects List

Fossil Resources and Retirement

Japan does not own coal resources domestically, almost all of its coal resources are imported from coal mines in Australia and Indonesia.

There is no committed coal phase-out plan from the Japanese government, but the authority plans to retire 100 inefficient coal-fired generators by 2030, which is over two-thirds of the total coal-fired generators in the country. In FY2023, the Government of Japan planned to decommission 100 MW of liquefied natural gas, 110 MW of oil, and 33 MW of coal capacity.

In the 2050 long-term vision, the government plans to decarbonize thermal power by utilizing hydrogen, ammonia, and carbon capture utilization and storage, which are considered to be controversial by the NGOs.

In 2023, when the G7 summit was held in Sapporo, Japan, the proposal from Canada and the UK on "setting a 2030 date for completing the goal of an accelerated phase-out of domestic unabated coal power generation" was rejected by Japan, U.S., and EU.

Employment

Current employment by sector

In 2021, the KIKO Network 気候ネットワーク in Japan estimated that there were 151,000 workers employed in fossil fuel and energy-intensive industrial sectors, of that, around 14,207 were working in fossil fuel power sector

Prospective employment from renewable energy sector

Potential offshore wind workforce including C&I(commercial and industrial) and O&M(operations and maintenance): 985MW with 1118 technicians.

JWPA(Japan Wind Power Association) estimated in 2023 that by 2050, there would be 355,000 jobs with 140GW in total to be created by the wind industry in Japan. Of that, 100GW will be offshore wind capacity, and 40GW will be onshore wind.

IRENA's 2023 report highlights that according to input-output analysis, achieving a capacity of 7 GW by 2030 could generate 54,000 jobs, including 20,000 direct jobs and 34,000 indirect jobs during the construction phase. Additionally, around 4,560 jobs would be created for operation and maintenance (O&M) as the farms become operational. If the capacity reaches 36 GW by 2040, it has the potential to create 69,000 jobs, with 18,000 dedicated to O&M.

Renewable Energy Institute estimates that offshore wind construction will require 30,000-60,000 jobs per year and will total to more than 1.4 million jobs by 2050. This would have an economic ripple effect of more than 34 trillion yen. A major challenge for Japan's offshore wind industry is the fact that demand for workers exceeds the number of individuals with the suitable training and skills.

Land availability

Offshore Wind Power Foundations type and Potential(Area) in Japan, NEDO, Nov-8-2022

According to NEDO(New Energy and Industrial Technology Development Organization), the biggest public research center on industry and technological innovation for energy, shows the potential ranges for different types of offshore winds from its research in 2022:

• Fixed Bottom Wind requires water depth from 0-50m, with approx.21,000km2 potential area in Japan

Gravity (2.4MW) NEDO Choshi (～2016), Jacket × Gravity (2MW) NEDO Kitakyusyu(～2016)

• Floating Water Wind requires water depth from 50-100m, with approx.42,000km2 potential area in Japan

NEDO Project (Barge Type) Hibiki

• Floating Water Wind requires water depth from 100-200m, with approx.56,000km2 potential area in Japan.

Semi-submersible (2MW), METI Fukushima(～2020), Spar（2MW), MOE Goto(～2015)

In 2023, the Japanese government is discussing expanding the wind farm locations from the inside territorial waters, which is 22km off the coast, to the exclusive economic zone (EEZ) which is 200 nautical miles, or about 370 km off the coast. The EEZ zone is estimated to be 45,000 km2 by the Asia Wind Energy Association and is the 8th largest EEZ area in the world.

According to The Environment Ministry and others, the number of sites suitable for wind power generation with water depths of less than 200 meters will be three times greater than if they were limited to within 30 km of the coast.. This discussion would be crucial for the development of Japan because the geological condition is less suitable for mounting wind farms in near seabeds compared to the conditions in other countries. Expanding wind farm locations would also expand the potential for floating wind farms. From experiences in other countries, seabed in the territorial waters area belongs to the national property, whereas EEZ lacks a legal framework and requires more coordinating efforts with fishermen and shipping companies.

Environmental and Social Impacts

Overview of current fossil fuel impacts

Health Impact on Local Residents in Kushiro, No Coal Kushiro釧路火力発電所を考える会

There are several alliances organized by local citizens to keep tracking the impact of coal-fired power plants. One of these groups, No Coal Kushiro, aims to stop the projective coal-fired power plant Kushiro power station located in Kushiro City, Hokkaido. According to their website, "The scale of the project is 112,000 kW, which is slightly below the 112,500 kW required for the national environmental assessment procedure, and construction has been started without conducting the national environmental assessment." The construction was delayed but shortly resumed and started operating in December 2020. From the map the No Coal Kushiro provided on their website, many schools, hospitals, and clinics are within 5 km of the Kushiro power station, increasing the health risks coal-fired pollution caused to children and the elderly to various diseases. These impacts are made more acute by the fact that the plant lacks scrubbers to reduce its pollution.

Unlike the majority of the coal-fired plants in Japan which import coal overseas, the Kushiro power station claims the operation can boost the local economy because it tries to revive a once-retired small-scale mine in the city and can "produce and consume by the locals (地産地消)" According to the No Coal Kushiro, "a large amount of tax money was spent to revive the coal mine that was once closed, restart the coal mining business, generate power using the coal that was dug out from there as fuel, and sell the generated electricity."

Also, the campaign points out that the local production and consumption (地産地消) have a high chance of being false because "in 2002, Taiheiyo Coal Mine closed and Kushiro Coal Mine Co., Ltd. (KCM) took over the coal mining business. However, the coal mining volume, which used to be 5 million tons per year, dropped to 700,000 tons when KCM took over and has since declined further. Due to the decrease in the amount of coal mined by KCM, the train carrying coal was discontinued in June 2019. All the coal on the land side has already been dug up, and there is almost no coal left on the seabed. There is a high possibility that the business of “local production for local consumption” will not be viable."

Impacts on the local community, sendai sekitan 仙台港の石炭火力発電所建設問題を考える会, 2018

Another local campaign happened in Sendai, Tohoku Region in the northeast of Tokyo. From the map below, the Sendai Takamatsu power station 仙台高松発電所 is canceled already. The company announced on April 10, 2018, that it would withdraw from the project. Also, on June 1st, Sumitomo Corporation announced that it would change its plan to biomass-only combustion.

When the Sendai power station 仙台パワーステーション was proposed, it was not subject to an environmental assessment under the Sendai City ordinance because the capacity is under the threshold, and no assessment was conducted. (Now, all coal-fired power plant plans in Sendai City are subject to environmental assessments.) The project is only 1km away from the Gamo Tidal Flat 蒲生干潟, a wetland and sandy beach ecosystem that provide food and habitats for migratory birds and benthic animals. No clear data is released by the coal-fired company of the impacts on the wetland. The Sendai power station started operating in 2017.

3km radius of elementary schools' region in Kobe City, kobe sekitan, 神戸の石炭火力発電を考える会

The ongoing lawsuit against the Kobe power station 神戸発電所 is due to the facility's location within a 3km radius region of many elementary schools and causing rising risks to the pupils' health. The Kobe local groups also argue that in Kansai, summer peak demand decreased by about 15% compared to before the March 11 2011 Japan Earthquake due to the energy saving initiatives from the citizens and businesses, and the trend of energy consumption in the region is expected to continue to decline. It is doubtful about the role of this coal-fired power plant.

Potential impacts from renewable expansion

In 2021, the wind projects at Akita and Noshiro ports aroused concerns over the possible impacts on the local fisheries. The coasts of Akita and Noshiro are breeding areas for light brown sandfish, a commercially harvested species, so habitat disruptions may impact the entire lifecycle of local populations. Similarly, in 2022, local fishers groups raised concerns that if Isumi City is designated as a "Promising Area," it will increase the risk of losing fish habitats due to changes in seafloor foundation work of offshore wind construction. In principle, sea areas are required to be restored to their original state once wind turbines are removed, according to the Law Relating to the Prevention of Marine Pollution and Maritime Disaster.

Civil Engagement

The network of coal phased-out campaigns in Japan is nationwide. The Japan Beyond Coal campaign aims for retiring all coal resources in Japan by 2030.

Coal-fired plants in Tokyo Bay: Cancelled and Ongoing Projects, 石炭火力を考える東京湾の会

There are also matured local networks for protesting against coal-related facilities in different prefectures. No Coal Tokyo Bay 石炭火力を考える東京湾の会, an alliance organized by local citizens and four NGOs including Kiko Network, FoE Japan, Greenpeace Japan、patagonia-international パタゴニア日本支社, shows that several coal-fired power plants' constructions have been stopped by the local protest. These projects are located in Ichihara City 市原市(stopped in March 2017)、Chiba City 千葉市(stopped in Dec 2018), Sodegaura 袖ケ浦市(stopped in Jan 2019). Currently the local citizen is working on stopping the unit 1 and 2 coal-fired generators in Yokosuka 横須賀

Another No Coal campaign organized by the local citizen is called No Coal Kushiro, monitoring the Kushiro power station which has operated since 2020.

Sendai No Coal campaign against the Sendai power station is the first lawsuit against a coal-fired company in Japan since the project did not undergo environmental assessment due to the insufficient ordinance of the Sandia City government. On September 27, 2017, 124 Miyagi residents, including local residents, filed a lawsuit against Sendai Power Station Co., Ltd.

The Kobe Nop Coal Campaign is ongoing with the lawsuit against the construction unit of Kobe power station 神戸発電所. The Global Energy Monitor gathered information on the history and the lawsuits process on page Kobe power station

The Matsushima power station 松島発電所 with two units in operation and one unit under the pre-permit stage, is also the main site of the GENESIS Matsushima Project (GENESIS松島計画). The Act Matsushima (Act松島) campaign page shows more details about the civil initiatives.

Symbolic Importance

Unlike Europe and other countries, the geological conditions are challenging for Japan to develop a large amount of bottom-fixed mounting wind farms. This is mainly because there are few shallow seas around Japan suitable for mounting turbines. The potential of floating wind is three times larger than the bottom-fixed type. If the innovation progress, investment, and supply chain come into place, Japan can explore large-scale floating wind farms with less impact on the marine system. Therefore, floating offshore wind farms should be the majority of the country's wind energy.

Governmental information

In 2011, the environmental impact assessment (EIA) process in Japan started to include wind projects over 10MW, and the regulations came officially into effect in 2012. The minimum time necessary for the EIA process is three years.

Related government papers

• Act on Promoting the Utilization of Sea Areas for the Development of Marine Renewable Energy Power Generation Facilities (Act No. 89) 海洋再生可能エネルギー発電設備の整備に係る海域の利用の促進に関する法律 was published in 2018. It established a framework for carrying out these measures, including public tenders to select entities to conduct offshore wind power projects in four promotion zones and the establishment of a council for regional coordination. It also allows general sea areas to "not administered under specific laws or regulations to be put to exclusive use for a maximum of 30 years."

• Port and Harbor Act (Act No. 218 of 1950) 港湾法: Established in 1950 and more recently updated in 2018, the Act outlines regulation for developing and managing Japan's port infrastructure and waterway maintenance.

• Vision for Offshore Wind Power Industry 洋上風力産業ビジョン was published in 2020 by the Public-Private Council on Enhancement of Industrial Competitiveness for Offshore Wind Power Generation (洋上風力の産業競争力強化に向けた官民協議会. It outlines the laws and regulations accountable for screening and supervising the potential environmental and social impacts from offshore wind facilities. Specifically, offshore wind facilities in Japan should be inspected under the Electricity Business Act, the Port and Harbor Act, the Ship Safety Act, the Environmental Impact Assessment Act, and the Building Standards Law. Some restrictions and requirements awaiting to be formulated are also stated in the Vision for Offshore Wind. It calls for clarification of the criteria for determining when to suspend work during strong winds in offshore wind power crane operations, relaxing conditions that prohibit mobile cranes from traveling with suspended loads, and clarifying the criteria for granting permission to leave in place fixed-bottom wind turbines.

• 6th Strategic Energy Plan 第6次エネルギー基本計画 was published in 2021

• Green Growth Strategy Through Achieving Carbon Neutrality in 2050 2050年カーボンニュートラルに伴うグリーン成長戦略を策定しました was published in 2021, with offshore wind targets stated in the document.

The Japanese government aims to establish a central bidding system for offshore wind projects. The central government first worked with local prefectures including Hokkaido (projects: Gann-u and Minami-Shiribeshi), Yamagata (projects: Sakata), Iwate (projects: Hirono-cho) on testing an auction process. As part of these projects, the national government is coordinating with these prefectures on wind resource measurements, seabed surveys, environmental impact assessments, and local community surveys. These measurements will be finished by 2025 and ready for the auction round. After the auction in 2021, The Japanese government and the Public-Private Council (洋上風力の産業競争力強化に向けた官民協議会) are working on improving information disclosure, two-stage developer selection, more reasonable price, and non-price point allocation and early introduction of the centralized auction system.

Relevant political coalitions

• Japanese Ministry of Land, Infrastructure, Transport and Tourism (MLIT) - for seabed-right leasing, holding Public-Private Council on Enhancement of Industrial Competitiveness for Offshore Wind Power Generation(洋上風力の産業競争力強化に向けた官民協議会) with METI.
• Japanese Ministry of Economy, Trade and Industry (METI) - for setting capacity targets, auction process, and technological development.
• on Analysis of potential for and challenges in mid- to long-term introduction of offshore wind power generation;
• The Public-Private Council on Enhancement of Industrial Competitiveness for Offshore Wind Power Generation(洋上風力の産業競争力強化に向けた官民協議会) held by MLIT and METI to analyze field-based challenges such as manufacturing and installing turbines, marine civil engineering, maintenance work, etc.); setting approaches for developing infrastructure and environments for systematic introduction (Power system integration, harbors/industrial complexes, etc.); and involving investments by companies (related industries), cost reduction, etc.

Private sector:

• Nippon Export and Investment Insurance (NEXI): investing overseas offshore wind farms

• Japan Wind Power Association (JWPA) 日本風力発電協会: Aims to expand wind generation in Japan by convening relevant private sector stakeholders which, in turn, will improve energy security and fight climate change.

• Renewable Energy Association for Sustainable Power Supply (REASP) 般社団法人再生可能エネルギー長期安定電源推進協会: Promote renewable energy throughout Japan with a specific focus on reducing burden on ratepayers while reducing reliance on feed-in tariff financing.

• Japan’s Floating Offshore Wind Group 浮体式洋上風力発電推進懇談会: Launched by Equinor, JGC Japan, Ocean Winds, Shell, Sumitomo Corporation, and Toda Corporation, the Group aims to promote floating wind technology as a mature and tested foundation suitable for Japan's offshore wind future.

FIT and Tender Process

Auctions of offshore wind started in 2019 under the law on Promoting the Utilization of Sea Areas for the Development of Marine Renewable Energy Power Generation Facilities, which came to effect in the same year. Bids are evaluated both on cost, with the lowest tender price receiveing highest scores, and project feasibility, which encapsulates business and stakeholder engagement planning.

Round 1 Competitive FIT Auction selected three areas:

• Noshiro City・Mitane Town・Oga City, Akita Prefecture. Support revenue from FIT (13,260 ¥en/MWh). Operate by 2028
• Yurihonjo City（North・South), Akita Prefecture. Support revenue from FIT (11,990 ¥en/MWh). Operate by 2030
• Choshi City, Chiba Prefecture. Support revenue from FIT (16,490 ¥en/MWh). Operate by 2028

Round 2 auctions aim to install approximately 1.8 GW of capacity: 700 MW off Niigata, 692 MW off Akita, and 424 MW of Nagasaki. The second round of the auction in March for a wind farm offshore Happo-Noshiro, Akita Prefecture was suspended in March 2022, though in March 2024, the results announced that a consortium of Japan Renewable Energy, Iberdrola Renewables Japan, and Tohoku Electric Power had won the auction. Round 3 is in-process (as of April 2024) with winners expected to be announced in December 2024.

Offshore wind call areas are identified through a three-stage selection process: 1) central government works with prefectural governments to identify "potential areas" for development; 2) "potential areas" are assessed and upgraded to "promising areas" and evaluated by a third-party committee; and 3) "promising areas" are upgraded to "promotion areas" that are then auctioned off via tender. Unlike previous tender processes, the government of Japan now leads studies confirming grid connection capability, which was previously led by project developers. The new study process is called a "grid security scheme" and is intended to accelerate offshore wind development.

Transmission

Current transmission resources

Most of the country only has a unified frequency for its electricity transmission. However, West Japan and East Japan are using different frequencies. This is because during the Meiji era, when the electric power industry spread, Tokyo imported a German-made 50Hz generator, while Osaka imported an American-made 60Hz generator. There have been discussions on whether or not domestic frequencies should be unified, but due to the enormous cost and time required, they have not been unified to this day.

Japan is a country with frequent natural disasters such as earthquakes and typhoons. Black-outs events like the Hokkaido Eastern Iburi Earthquake in 2018 and the power shortage in the Tokyo metropolitan area in March 2022. In order to prevent large-scale black-out to happen again, power interchange through inter-regional interconnection is necessary. As a result, existing power transmission and distribution networks face issues such as differences in domestic frequencies and insufficient capacity of interconnection lines between regions. However, many of the steel towers and utility poles that make up the transmission and distribution network were built during the period of high economic growth in the 1970s, and are now aging. Many power transmission and distribution facilities have already been installed for more than 50 years, and large-scale equipment renewal of the national and regional grid is essential.

The government announced the Next Generation of the energy network plan, strengthening the power grid, its flexibility, and transparency on the information for related service stakeholders.

as of October 2023, Japan has 29 Specified Transmission, Distribution and Retail Companies; seven Specified Transmission and Distribution Companies, three Transmission Companies, and 10 General Transmission and Distribution Companies.

New transmission needed for renewables

japan electricity transmission lines & offshore wind sites, osw project areas & transmission lines (beta version), 自然エネルギー財団

The Renewable Energy Institute 自然エネルギー財団 published the map of all current electricity transmission resources with operating and projective offshore wind sites, OSW Project Areas & Transmission Lines (beta version),

In the Vision for Offshore Wind Power Industry, it stated the initiatives needed to be taken by the Japanese government on relevant infrastructure. The key actions on power grid-related initiatives are:

• Detail out and announce the first draft of the Power Grid Establishment Master Plan, which will contribute to the realization of introduction targets, by the coming spring.
• To harness the potential of offshore wind power, it is important to have a large power transmission network to bring power from suitable locations for offshore wind power generation to high-demand areas. To achieve this end, it is important to commence a concrete study of the introduction of HVDC power transmission, including technical issues and costs.

Furthermore, the Organization for Cross-regional Coordination of Transmission Operators, JAPAN (OCCTO) 電力広域的運営推進機関 developed a plan to upgrade the national grid by 2050 in order to adjust the 50% renewable energy in the national mix. The amount is expected to be 6 to 7 trillion Japanese yen by the mid-century. Besides, there is a new power grid project to connect Hokkaido and Tohoku for its increasing solar and wind power generation other than this budget.

Social and environmental impacts of new transmission

The Japanese government started to discuss expanding wind farms from inside territorial waters to Japan's larger exclusive economic zone because of the limited potential capacity in the near seabed areas for mounting wind farms. Building transmission lines from EEZs to the land would raise the cost of electricity for ratepayers.

There is a mismatch between areas with high demand and areas with the richest potential for offshore wind. For example, Hokkaido and Tohoku have significant potential and limited demand, increasing the need for transmission infrastructure. The power demands from these two regions are only half of the demand in Tokyo.

Moreover, the burden of long-distance transmission and grid development, plus associated costs, tends to fall onto developers. Long-distance transmission lines also affect nearby communities and ecosystems, which increases social costs of offshore wind projects.

Another issue is the insufficient transmission line capacity that required coordination with fishermen. Ishikari City, Hokkaido (石狩市,北海道) plans to resolve issues such as coordination with fishermen as soon as possible and aim to upgrade the area to a "promising area" in fiscal 2023.

Ownership

Major owners of current fossil capacity

Coal-fired Power Plant Owner's List

The top five leading entities in terms of operating coal power capacity in Japan collectively account for over 50% of the total operating capacity within the country. Among these companies, J-POWER 電源開発株式会社 and JERA Co. Inc 株式会社JERA are the primary owners of the coal power with over one-third of the national total.

The distribution of capacity among these companies is provided below, with the percentage of the national total operating capacity:

• J-POWER 電源開発株式会社: 8,412MW (15.26%)
• JERA Co. Inc 株式会社JERA: 9,670MW (17.54%)
• Tohoku Electric Power Co Inc 東北電力株式会社: 3,800MW (6.89%)
• Kyushu Electric Power Co Inc 九州電力株式会社: 3,460MW (6.28%)
• Chugoku Electric Power Co 中国電力株式会社: 3,175MW (5.76%)

Gas-fired Power Plant Owners' List

The top five leading entities in terms of operating gas power capacity in Japan collectively account for over 80% of the total operating capacity within the country.

Among these owners, JERA Co. Inc 株式会社JERA is the primary owner with 56.25% operating gas-fired capacity in Japan. The distribution of capacity among these companies is provided below, with the percentage of the national total operating capacity:

• JERA Co. Inc 株式会社JERA: 43,691MW (56.25%)
• Kansai Electric Power Co (KEPCO) 関西電力株式会社: 8,161MW (10.51%)
• Tohoku Electric Power Co Inc 東北電力株式会社: 5,733MW (7.38%)
• Kyushu Electric Power Co Inc 九州電力株式会社: 4,655MW (5.99%)
• Chugoku Electric Power Co 中国電力株式会社: 2,543MW (3.27%)

Major owners of prospective offshore wind

The list below shows the major offshore wind companies with at least a total capacity of 1GW of operating or in-development projects in the pipeline. It is worth noticing that the company Japan Renewable Energy CORP (JRE) ジャパン・リニューアブル・エナジ was purchased by Eneos Holdings, which is Japan’s biggest oil refiner.

• Cosmo Eco Power CO LTD: 1,050 MW (600 MW is co-owned by Iberdrola Renewables, and 450 MW is co-owned by Kato Sogyo Construction)
• Flotation Energy PLC: 1,520 MW
• Copenhagen Infrastructure Partners and Mitsubishi Heavy Industries 三菱重工業株式会社: 1,000 MW
• Marubeni CORP 丸紅株式会社: 1,279 MW (279 MW co-owned by Obayashi; Tohoku Electric Power; Cosmo Eco Power; Kansai Electric Power (KEPCO); Chubu Electric Power; Akita Bank; Ohmori; Sawakigumi; Kyowa Oil; Kato Kensetsu; Kanpu; and Sankyo)
• Mitsubishi CORP: 1,301 MW (391 MW co-owned by Chubu Electric Power, and 910 MW co-owned by Venti Japan and C-Tech)
• WPD AG: 1,000MW

Supply Chain

Japan currently lacks a manufacturing industry for offshore wind development and relies on overseas imports. The government has announced an investment plan for the supply chain. The supply chain will be invested with an overall under two development phases. Phase one is the Developing component technology stage, and phase two is the testing and demonstration stage. The two phases are integrated into the plan of the Green Innovation Fund.

Under phase one development, the supply chain of offshore wind in Japan aims to reduce costs by using substitutes for steel materials (concrete floats, synthetic fiber mooring), to produce wind turbines that are suitable for natural conditions such as typhoons, earthquakes, lightning, strikes, and low wind speeds in Japan and Asia, to improve the durability of the cables that move along with the floating structures, and to predict failure rate using AI and big data. In phase two, the industry will integrally design and demonstrate an entire system that combines wind turbines, floating structures, and cables and verify the cost reductions.

The following sections list the companies involved in the offshore wind supply chain on technological advancement.

Wind Turbine Technology

Supply Chain of Wind Turbine Technology. sourced from Keisuke MUTO, Introduction of Japan’s Offshore Wind Policy, Energy Efficiency and Renewable Energy Dept., Agency for Natural Resources and Energy, METI., July 2022

Nacelle internal components:

• Bearing: Daido Metal 大同メタル工業株式会社, NTN Corporation
• Accelerator: Ishibashi Manufacturing Co., Ltd. 株式会社 石橋製作所

Tower:

• Komai Haltech 株式会社　駒井ハルテック

Manufacturing and Installing Floating Foundations

Supply Chain of Manufacturing and Installing Technology in Offshore Wind Industry Technology. sourced from Keisuke MUTO, Introduction of Japan’s Offshore Wind Policy, Energy Efficiency and Renewable Energy Dept., Agency for Natural Resources and Energy, METI., July 2022

• TLP(Tension Leg Platform): Modec 三井海洋開発, etc.
• Semi-submersible: Hitachi Zosen 日立造船株式会社, Japan Marin United ジャパン マリンユナイテッド株式会社, Tokyo Gas 東京ガス, etc.
• Spar: TEPCO RP 東京電力 リニューアブルパワー, Toda Corporation 戸田建設株式会社, etc.

Dynamic Cable Offshore Substation

Supply Chain of Dynamic Cable Offshore Substation in Offshore Wind Industry Technology. sourced from Keisuke MUTO, Introduction of Japan’s Offshore Wind Policy, Energy Efficiency and Renewable Energy Dept., Agency for Natural Resources and Energy, METI., July 2022

TEPCO RP 東京電力 リニューアブルパワー etc.

Operation and Maintenance

• Drone Inspection: Kansai Electric Power 関西電力株式会社 etc.
• Cable Laying Vessel(CLV): Furukawa Electric 古河電気工業株式会社 etc.
• Service Operations Vessel (SOV): Tokyo Kisen 東京汽船株式会社 etc.
• Digital Platform: TEPCO RP 東京電力 リニューアブルパワー, Toshiba 東芝, Hokutaku 株式会社北拓, NTN Corporation, Toda Corporation 戸田建設株式会社

Finance

Japan’s average annual clean energy investments increased ~40% between 2016-2020 and 2021-2023.

Potential providers of wind/solar finance

The Japan Renewable Energy (JRE) purchase deal by Eneos Holdings was $1.8 billion in 2021.

According to GWEc's report, the METI allocated JYP 119.5 billion ($940 million) in October 2021 for a 12 years cost reduction project, with the first 3-5 years for component technology development and a maximum of 8 years for testing and demonstration. The purpose of this finance is to achieve a generation cost of JPY 8-9/kWh (EUR0.06-0.07/kWh) with seafloor-mounted turbine by 2030.

Several companies will contribute innovation funding to offshore wind technologies under the Green Innovation Fund allocated by METI

• Phase 1(3-5 years): Development of elemental technologies with a budget amount of up to JYP 34.5 billion yen
• Phase 2(up to 8 years): Demonstration of floating system with a budget amount of up to JYP 85 billion yen

The details of different phases and the allocation of the fund can be seen from the report: NEDO’s activities toward expansion of offshore wind power generation 洋上風力発電の導入拡大に向けたNEDOの取り組み について and the NEDO Green Innovation Fund Project for Reducing the Cost of Offshore Wind Power Generation

Moreover, the Ministry of Economy, Trade and Industry established a Green Innovation Fund to provide ongoing support to companies working to advance clean energy and economic goals through research and development, demonstration projects, and implementation. The fund will last for 10 years and is valued at 2 trillion yen. Reducing costs of offshore wind projects is one priority area for the fund.

Finally, the Ministry of Economy, Trade and Industry launched the Basic Policy for Realization of GX (Green Transformation) which will leverage 20 trillion yen to foster economic growth, achieve carbon neutrality, and build a strong supply of energy by 2050. The Policy will leverage 150 trillion yen in public-private funding within the next ten years.

In recent years, however, Japan has continued to prioritize fossil fuel spending overseas, with $10 billion going to expand Asia's LNG market in 2021. A report from 350 Japan states that "[In Japan as of August 2021] The amount of bonds and stocks held by fossil fuel companies is 16 times that of bonds and stocks held by renewable energy companies."

Public Private Partnerships

Japan's Act on Promotion of Private Finance (PFI Act) was created to improve and create facilities through Public-Private Partnerships. The act only applies to "public facilities" but allows for the ability to lend national and local administrative assets to those projects. The process has four major steps: 1. A proposal for a project that falls under the PFI regulations; 2. an implementation of PFI feasibility study; 3. selection of a private business operator to implement the project; 4. implementation of the project. It's also possible for PFI projects to be granted subsidies.

Feed-in Tariff

Renewable energy development in Japan is supported by feed-in tariffs, which were first introduced in 2012. The tariff rate is locked in for 20 years after the project begins operation. In addition, a feed-in premium program was established in 2021 which allows power producers to sell electricity at market price plus a fixed premium. Projects tendered in Round 1 were supported by feed-in tariffs whereas Round 2 projects were supported by feed-in premiums.

Other

In February 2024, Japan’s Climate Bonds Initiative certified the world’s first Climate Transition Bonds in line with Japan’s Basic Policy for the Realization of GX (Green Transformation). The Bonds were auctioned in two groups, 5-year and 10-year, and were valued at JPY 800 billion each. This initiative is part of Japan’s larger efforts to mobilize JPY 150 trillion in public and private investments by 2050. The Bonds also include carbon pricing with a delayed structure to enable planning around future revenue.