Japan To Tap World’s Largest Unexplored Wind Energy Market
Renewable energy is soon to be a major source of electricity for Japan, and international wind power companies are positioning themselves to take advantage of what is now seen as a lucrative wind energy market. Up until recently, many global energy companies have been wary of wind power generation in Japan, stymied by high installation costs and governmental regulations. But Japan’s invigorated emphasis on renewable energy through its new Basic Energy Plan may have changed many perspectives. Circled by oceans and breezes, Japan has an unexplored wind energy market that is becoming more and more appealing to energy companies.
On July 3, the Cabinet approved its new energy plan, which includes a policy shift for the first time toward making renewable energy a major electricity source, while calling for support for the development of offshore wind power capacity. Wind power accounts for less 1% of Japan’s electric power generation, compared with 10% in Europe.
The increased focus on renewables underscores Japan’s difficult challenge to reduce greenhouse gas emissions in the years ahead under the 2015 Paris Climate Accord. Toward 2030, the government aims to have renewables account for 22% to 24%, fossil fuels 56%, and nuclear power 20% to 22% in the country’s electricity generation.
In essence, among the Basic Plan’s targets are a doubling of Japan’s energy independence ratio, a doubling of the percentage of electricity generated by renewable sources and nuclear power, and a 30% reduction in energy-related CO2 emissions — all by 2030.
Offshore wind power generation produces electricity through wind turbines erected at the sea. It can generate power more efficiently than onshore because the wind is stronger at sea than over land. Floating turbines are likely to be favored in Japan, which is surrounded by deep waters.
Several companies have shown pronounced interest in Japan’s wind energy market.
- The world’s largest offshore wind power generating company, Denmark’s Orsted, which accounts for around 30% of the world’s offshore wind power generation capacity, plans to establish a Japanese subsidiary in 2018. Orsted plans to start out by setting up turbines on bases fixed into the seabed, as it has done in Europe.
- Norway’s Equinor, the biggest oil company in northern Europe, will begin a marketing campaign in Japan in September. Equinor built the world’s first floating wind farm in Scotland, and will apply its technology for pumping oil from underwater oil fields to offshore wind power generation. It plans to raise its wind power generation capacity in Japan to 750,000 kilowatts, the same as in Britain.
- German wind power company E.ON recently began research into whether to enter the Japanese market, aiming to make a decision by the end of 2018. E.ON has expertise in addressing the kind of natural hazards that occur frequently in Japan, gleaned from experience in places such as Texas, which is prone to hurricanes, and Italy, which has frequent seismic activity. Should E.ON decide to get into the market, it would likely build onshore wind power facilities.
- The world’s largest offshore wind turbine company, Denmark’s MHI Vestas Offshore Wind, also recently founded a Japanese subsidiary.
- Spain’s Siemens Gamesa Renewable Energy has developed a wind turbine about 20% more powerful than conventional models. It stresses the turbine’s efficiency and ability to handle especially strong winds.
- Eco Power, which plans to start generating electricity from wind power in the fiscal year from 2021, hopes to manage four or five offshore wind power farms by the mid-2020s by acquiring expertise and know-how from foreign partners.
Many challenges remain to the development of wind power generation in Japan. Among them is a lack of suitable seabed locations for fixing turbines, making them more costly to install because of the greater amount of steel required. Additionally, procedures for establishing floating wind farms are not well defined, including a framework for negotiating with fisheries cooperatives.« Solar Roads Light the Way in China London Creates Energy Efficiency Fund For Small Business »