Japan is set to draft new rules and support framework in a drive that points to construct offshore wind projects at 30 locales by the end of the next decade. The new policy plans for three or four projects each year with a total generation capacity of 1 gigawatt (GW), from the fiscal year beginning in April 2021 until 2030/2031. By the end of the decade, a total of 10 GW of potential generation sites are expected to be identified for further development, says GlobalData, a leading data and analytics company.

Ankit Mathur, Practice Head at GlobalData, comments: “Unlike the last bill passed in 2018, identifying wind development zones, this draft bill sets clearer targets and objectives assisting the expansion of the sector. Japan has a strong presence of domestic sponsors, who are dynamic investors in the sector. Marubeni, for instance, is an active investor in European offshore wind. Besides, a huge sum of domestic capital is available to finance offshore wind projects. All these factors amalgamating with the implementation of the proposed bill can bolster the future outlook of the offshore wind sector.”

To maintain the grid stability, utilities have restricted the incorporation of electricity from renewable sources into the grid. However, the  achievement of  the grid parity by renewables has drawn the focus on to generation from cost-effective and pollution-free renewable sources. The Ministry of Economy, Trade and Industry (METI) is further planing to revise power grid rules to scrap restrictions on drawing electricity from renewables for wide adoption. As environmentalists have rendered the nation’s emission targets to be less yearning, it is likely for the nation to ramp up development in the offshore wind segment to boost carbon neutrality.

Mathur concludes: “Unlike other countries, Japan’s ability is constrained to substantially upscale onshore wind and solar projects because of topography not conducive for on-land projects. Offshore wind presents a complimentary approach to the country’s current reliance on solar PV for driving the energy transition towards renewables. The proposed plan, if implemented, will be a turning point in the country’s efforst towards decarbonisation. Besides, the plans and strategies to expand the offshore wind prospects, the country also needs to review the current timelines, technology and a dependable supply chain. Apart from the generous feed-in-tariffs available, Japan seriously needs to shorten the five-year long environmental assessment process to bring in the sector competitiveness to take-off and lure global investors.”