July 09, 2020

Japanese Offshore Wind Farm Auctions Have Begun

by PowerHub Editor

You can almost hear the gavel banging. The third-largest wind market in Asia has commenced its first-ever offshore wind farm auction this month. Off Goto, Nagasaki, this project is one of eleven areas identified by the Ministry and Port Authority of Japan as viable offshore locations.

The Goto wind farm will have a capacity of at least 16.8 MW, and a 20-year seabed lease. The country is hoping to make this the start of a new era of renewable energy projects and their management. Following Goto, a massive 139 MW offshore plant is also in the makes, with plans to begin installations in 2021.

Offshore Wind Farms Market Constraints in Japan

The Global Wind Energy Council (GWEC) puts Japan’s cumulative installed wind energy capacity at 3923 MWs. Of this, a mere 66MW is offshore capacity. For an island nation, with deep waters, and the world’s most generous Feed-in-tariff (FiT) of $335, this doesn’t seem enough.

One wonders, why hasn’t Japan’s market for offshore wind farms taken off?

A number of factors are in play here. The biggest one being the reliance on local authority discretion. Historically, the local major’s administration processes seabed occupation rights. This means, even if rights are granted by one party, re-election in 3-4 years puts them at risk again.

According to the Japan Wind Power Association, this is one of the biggest risks faced by the offshore wind market in the country.  

Moreover, most renewable energy projects are subject to very lengthy and costly environmental assessments. Not only do these delay developments of green power, they have been a contributing cause of Japan’s lag to the two leading Asian renewable power hubs, China and India.

Nonetheless, as of June 2020, the country has put 15GW of offshore projects in the pipeline. A newly formed task force is now addressing these bureaucratic issues. As a result, strong momentum is replacing the decades-long vetting process of the local authorities.

Therefore, this year will be an important one for a renewable energy boom in Japan, particularly for offshore wind farms.

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