Japan has notoriously been dependent on energy imports, being the world’s fifth-largest crude importer and second-largest LNG importer (having lost the top position to China last year). Its self-sufficiency ratio dropped substantially after the 2011 Fukushima incident, from some 20% to 7-8%. Even though Tokyo did manage to hew off a couple of percentage points from its import dependence (around 12% by 2020), this was largely done by means of curbing energy consumption and rendering it more energy efficient. It is against this background that Japan started to make its first steps towards an all-encompassing renewables policy, going beyond the first pioneering projects that might have showed the way forward for Tokyo. Wind energy has so far been underrepresented in Japan’s energy matrix, however a slew of recent developments could portend a solid future for wind farms along the Japanese coast.

The share of renewables sources in Japan’s total power generation has risen by approximately 1% per year in the past decade, bringing the tally to almost 20% in 2020. This is certainly a laudable achievement yet there are many countercurrents hindering renewables’ penetration. First and foremost, Tokyo’s aggregate primary energy supply is still dominated by oil – with a fleet of refineries whose total throughput capacity exceeds 3.3mbpd and a very energy-intensive industry sector, Japan still needs the fossils (not to forget that Japan still uses oil for electricity generation, albeit at 5% of total production). Second, oil and gas still prevail in the sphere of power generation, the two combined accounted for 70% of the total national tally. Against all this. the new Suga-led government tightened Japan’s emission-reduction goals, stipulating that by the fiscal year 2030 greenhouse gas emissions should drop by 46% compared to 2013.

Interestingly, Japan’s new ambition of reaching a 50% share in power generation for its renewables and nuclear generation capacities does not specify the exact split between categories. Japan’s METI is currently reviewing its strategic nuclear plan yet the current could serve as a guidance – under it, nuclear energy is to account for 20-22% of power supply (and renewables for another 22-24%). Interestingly, this does not alter that much from Japan’s long-term plans before the Fukushima catastrophe. Before 2011 renewables amounted to some 10% of electricity generation (of which 8% was hydropower, just as today) and nuclear energy averaged 25%. As of today, Japan’s nine operating reactors account for merely 7% of aggregate electricity generation, all the while it keeps 30 reactors idled, either indeterminately or having it reassessed for a prospective restart.

Japan has only 70 MW installed capacity of wind energy, with remarkably minuscule offshore numbers (4.4 MW). There are, however, three high-profile projects that might pioneer their way through Japan’s energy market. First, Japanese public utility firm JERA announced the country’s first-ever large-scale wind project, the 0.52 GW farm in Ishikari Bay, along the western coast of Hokkaido Island. Ishikari is also home to an operating LNG terminal, implying that a prospective wind farm might supplant some of liquefied imports that have heretofore supplied Sapporo and its surrounding area. JERA’s announced this March that it would seek to develop another 0.6 GW wind plant, just offshore the city of Tsugaru in Aomori prefecture, at the northern edge of Honshu Island. With construction expected to take 3 years in total, the two wind farms could come onstream by 2025.

In addition to JERA’s prospective projects, another large-scale wind developer might be shaping up, as can be attested by the 0.6 GW Seihoku-oki project managed by Acacia Renewables (bought up in 2020 by Iberdrola) in a joint venture with Cosmo Eco Power and Hitz. Following Iberdrola’s entering the Japanese wind market, the wind projects of Acacia boosted their status in terms of their probability. Now there is one problem with the above-mentioned projects – they have not yet been subjected to government auctions. Japan has so far had 5 solar auctions and 2 biomass auctions, with moderate solar success (4 auctions resulted in awarded capacity, totalling 574 MW) and complete lack of contracted capacities on biomass.

It is assumed that the first-ever wind auction will take place in June 2021 when Japan’s Ministry of Economy, Trade and Industry (METI) is to decide on the Goto project, a 16.8 MW capacity wind farm off Nagasaki. The second step to be taken by METI is assumed to be a tender for the construction of bottom-fixed offshore wind parks – 4 areas were designated in Round 1, however they do not correspond with any of the projected wind farms. With this, arguably the most interesting areas of Japan at the northernmost tip of Honshu and along the western coastline of Hokkaido remain to be designated by the Japanese authorities. The so-called Promising Areas for Round 2, to which Iberdrola’s Seihoku-oki and JERA’s Tsugaru should assumedly belong to, is expected to be launched in 2022. Potential wind energy areas in Hokkaido, i.e. the northernmost of Japanese islands, are even less designated despite being preliminarily listed as potential areas.

The gradual roll-out of wind auctions would naturally elevate the question of the Japanese government’s readiness to accommodate energy companies’ expectations and interests. If anything, Japan’s environmental impact assessments (EIA) still have quite the reputation of taking 3-5 years before the construction part can actually start. There is a logic underpinning the belief that maritime EIAs might be expedited to avoid unnecessary delays in Japan turning towards its greener future. Seabed deeper than in Europe’s North Sea and seismic risks anyways add additional layers to Japan’s offshore wind prospects, therefore Tokyo needs to offer attractive feed-in tariffs. One can assume that Tokyo is not willing to forgo commercial factors when shaping up its energy future and wind energy might play an important part in solving the overall equation but it will be quite the balancing act to do…