On June 30, Japan’s Ministry of Economy, Trade and Industry (METI) concluded the second round of bidding for offshore wind power tenders to construct 1.8 GW of wind power generating capacity dispersed over four specified areas. The latest bids support the Japanese Government’s goal to install 10 GW of offshore wind power capacity by 2030 and up to 30-45 GW by 2040. METI is slated to announce winners between December 2023 and March 2024. A consortium led by Mitsubishi won the first round of bidding for 1.7 GW in 2021.
Why it matters: Japan has immense untapped offshore wind energy resources that could help it meet its clean energy goals, and also diminish its role as the world leader in LNG imports and, with EV adoption, the country’s need to import 97% of its oil. The IEA estimates Japan could produce over 9,000 TwH annually from offshore wind, nine times greater than Japan’s projected electricity demand in 2040. The Japanese Government is also considering siting future turbines in its exclusive economic zone (EEZ), which could provide a steadier stream of electricity due to more constant wind speeds further offshore.
That said, Japan cannot meet its ambitious goals without considerably accelerating deployment. According to the Global Wind Energy Council, Japan’s total power capacity from offshore wind energy was only 136 MW in 2022, behind regional countries including China, South Korea, Taiwan, and Vietnam. Japan installed nearly two-thirds of that (84 MW) during 2022.
Despite Japan’s potential, several barriers have hampered offshore wind development over the past two decades. Unlike some of its early-adopting Western peers, Japan has deeper coastal waters that make projects more difficult and expensive. Recent technological innovations have helped to decrease installation costs and shorten construction times. Likewise, the country faces an elevated risk of earthquakes and typhoons, adding additional challenges for a stable, renewable energy supply. Some regions have raised concerns offshore wind development could harm local fishing industries and wildlife in the long-term. Japan’s parliament passed a 2019 law that revised the offshore wind bidding process, something that eased initial utility company resistance.