In 2020, the Japanese government announced that it would begin exploring the possibility of constructing and operating offshore wind farms with a maximum capacity of 155 MW off the shores of Noshiro City and Happo Town in Akita Prefecture.
The Japan Renewable Energy Corporation was then entrusted with undertaking a variety of studies, including environmental impact evaluations, as well as meetings with the local population and other stakeholders.
The move was part of the country’s plan to promote greater use of renewable energy.
Fast forward to 2022, the United States stated earlier this month that it would prohibit Russian oil and other energy imports to punish Moscow for its aggressiveness, despite the fact that Washington was not a significant purchaser of Russian oil.
Experts pointed out it might be difficult for Japan and its firms to follow suit, including giving up holdings in the Sakhalin 1 and Sakhalin 2 large-scale oil and gas projects in Russia’s Far East, which are critical to Japan’s energy security.
Japanese policymakers were afraid that Russia’s invasion of Ukraine and the subsequent spike in oil prices might harm economic development, despite the fact that there has been no immediate severe interruption in energy supplies. As such, they emphasised that there was an urgent need to expedite the use of renewable energy as a domestic energy source for decarbonization, which was also crucial for energy security.
Earlier this year, the Japanese government chose three consortiums, all led by Mitsubishi, to operate offshore wind farms with a combined generation capacity of 1.7 gigawatts in Tokyo, Akita, and Chiba prefectures.
Analysts were taken aback by the trading house’s group’s suggested tariff rates of Yen 11.99 per kilowatt hour, Yen 13.26 per kWh, and Yen 6.49 per kWh, which were much below the ceiling price of Yen 29 per kWh.
It was also noted that a number of major wind power corporations, including Denmark’s Orsted and Germany’s RWE, were interested in entering the Japanese market. Both companies were active in the Akita Prefecture area during this period.
Japanese official shared that the earlier exercise revealed that the prices were comparable to that of solar power. On this basis, the government wanted to accelerate the production of this renewable energy source and use the information gleaned from the earlier exercise to inform the developments of new renewable energy sites.
The working group from the Japanese government would convene a discussion forum with the relevant government subcommittees on 22 March, to discuss about the new criteria for the next offering exercise.
Terra Link Research 