Wood Mackenzie: Japan to Hit 4GW of Offshore Wind by 2028
Japan’s offshore wind capacity is expected to reach 4GW in 2028, a 62-fold increase from 2018, according to a new research by Wood Mackenzie.
Wood Mackenzie estimates that Japan will see a power generation shortfall of more than 10GW by 2030, as it struggles to restart 30 nuclear reactors to meet the national nuclear target, and renewables will play an important role.
“In light of the power shortfall, Japan will need to increase its coal imports, supported by renewable energy capacity,” said Senior Analyst Robert Liew. “In terms of renewable energy, scale matters and offshore wind is at an advantage.”
Japanese utility companies would prefer managing larger scale power plants such as offshore wind projects given the country’s experience and preference for grid management in managing nuclear plants, Wood Mackenzie said.
According to the consultancy, the participation of Japan’s largest utility Tokyo Electric Power Company Holdings (TEPCO) in offshore wind shows that the sector is commercially viable, which makes it easier for the government and local companies to accept it.
On the other hand, due to Hitachi’s plans to stop new turbine sales, it is questionable whether a local offshore wind supply chain can be fully established by 2020, Wood Mackenzie said, adding that this opens up opportunities for foreign suppliers, but adds to the challenge of achieving cost reductions.
“The medium- to long-term outlook for offshore wind in Japan looks especially promising with TEPCO’s involvement in offshore wind, the growing offshore pipeline and new policy measures to support wind development. We expect Japan to emerge as a key offshore wind market in Asia,” Liew said.
At the end of last year, the Bill on promotion of use of territorial waters for offshore renewable energy generation facilities passed both houses of Japan’s National Diet.
The bill, which promotes the commercial use of offshore wind, will be put into effect this spring, with the first offshore wind tenders expected in the spring or summer.
A working group has been set up to establish maintenance and management standards for projects. Discussions are also underway to streamline the application process for port and harbor projects in the lead up to the first tenders for potential sites in Aomori and Nagasaki prefectures, Wood Mackenzie said.