Japan seemed to be a country perfectly suited to wind energy. It is the world's third-largest economy and an industrial powerhouse, with tremendous electricity demand but scant indigenous energy supply. Yet even after the worst nuclear catastrophe since Chernobyl led to the closure of all reactors the wind sector has languished.
But now change is in the air.
Vigorous policy support for offshore projects and a mandated purchase price for their power are among signs that the business climate for Japanese wind is improving. "Everything is moving," says Yoshinori Ueda, international committee leader for the Japan Wind Power Association.
In early March, the government mandated purchase prices for offshore wind of JPY 36 ($0.35) per kilowatt hour. That same month, a bill aimed at calculating the optimal balance between all power generation sources was going through the final stages in parliament. It is expected to provide clarity on policy support for wind, albeit not until 2016. That year is also when utility unbundling is expected to result in easier grid connection for wind projects.
Japanese wind insiders talk about how Hiromasa Yonekura, chairman of the powerful Japan Business Federation known as Keidanren and a long-time critic of renewables as ineffective and costly, will soon be succeeded by Sadayuki Sakakibara, chairman of Toray Industries, which has developed carbon-fibre composites for wind-turbine blades and is seen as less beholden to the entrenched nuclear industry. His leadership is expected to nudge businesses and policymakers towards wind in the years ahead. "In 2015 or 2016, many conditions will have changed politically and economically," says Ueda.
Room for improvement
The Japanese government acknowledges that the lead time for Japanese wind farms has ranged between four to seven years, and that this has impeded projects from benefiting from mandated purchase prices for wind. Japan's wind industry is pressuring the government to bring this down to two years. As of March 2013, only two wind farms were receiving the feed-in tariff. A mere ten wind projects were under construction in March 2013, when the government issued an update on the situation, while 70 projects were crawling through the permitting process.
Japan's wind sector must still walk a very fine line. Following the 2011 catastrophe, strong grassroots support for scrapping nuclear power in favour of renewables emerged. But wind advocates are careful not to push their agenda too forcefully, lest they anger the nuclear supporters in the ruling Liberal Democratic Party.
The country has mothballed its nuclear reactors at great financial cost to the companies that have built them. The establishment is keener to restart reactors than to engineer a transition to renewables. But even if the country does turn some of its 50 reactors back on, policymakers are said to be quietly targeting a far lower level of operation than in the past, opening the door to renewables.
That is clearly behind some of the optimism on display at Wind Expo 2014 in Tokyo in February. Nearly 180 exhibitors attended the event, up from 167 at last year's inaugural event, part of a wider renewables event.
US wind turbine manufacturer GE had stayed away from Japan's moribund wind market for seven years, but chose Wind Energy Expo to announce its return with a 2.85MW turbine tailored to the country's frequent typhoons, lightning and turbulent wind conditions. "This is an example of technology that is designed very specifically for a market," GE vice-president for renewable energy, Anne McEntee, said in the keynote session.
The turbines turning in the waters off Japan demonstrate that this sense of purpose is not new. Just over six months following 2011's natural disaster, Japan's government approved a budget for the offshore wind farm in the waters near the devastated region. A consortium led by trading giant Marubeni and comprising some of the biggest names in Japanese industry got stuck into the project. "To move from budget approval to steel in the water in two years, is incredibly fast," says Annette Bossler, owner and managing director of Maine International Consulting, which advises on Japanese offshore wind.
Change on the offshore horizon
Floating offshore turbine development has grabbed big headlines - particularly after October, when the consortium commissioned a 2MW Hitachi turbine installed off Fukushima. Two Mitsubishi 7MW turbines will follow later this year or 2015.
At around the same time, other developers - with support from Kyoto University — commissioned a single 2MW Hitachi turbine installed off Nagasaki Prefecture's Goto islands in the East China Sea. The project, set to run for two years, produces electricity in demonstration tests conducted by Japan's environment ministry. The data gathered will be studied for the turbine's impact on fisheries and its ability to withstand typhoons.
The offshore sector did suffer a setback in January after publication of a government study that estimated installation costs for a hypothetical large wind farm exceeding 100MW to be double the average costs in northern Europe. Bossler agrees that until Japan develops a robust operations-and-maintenance supply chain, operation costs are liable to be high.
But she is puzzled by what she characterises as a passive response to the study from the Japanese wind sector and foreign companies eager to enter the Japanese market. She says the authors are known proponents of offshore wind, yet refrain from describing how significant drops in cost parallel to those seen elsewhere in wind and solar might occur. "Once you build a supply chain, costs will come down, but the report doesn't say that," Bossler says.
That market will take shape, believes Bossler. Japan has many necessary skills for building offshore wind, but it does not have offshore wind technicians, service vessels, or an offshore wind logistics approach. "Where do you store your parts for offshore," she says. "If you look at the entire supply chain that you need for offshore wind operations and maintenance, it doesn't exist in Japan. It's new for them. That is the opportunity for European companies."
Foreign suppliers and service providers apparently agreed, comprising 38% of exhibitors at Wind Energy Expo. Alongside Enercon and Siemens of Germany and South Korea's Kyungshin Cable was a Dutch government-backed delegation of eight wind-energy companies, who believe Japan is open for business. They include shipbuilder Damen Shipyards and energy research institute ECN. "The Japanese are searching for how it should be done," says Eric Kamphues, director at Dutch firm Offshore Consulting Partners. He says Japan is applying onshore regulations offshore. "That's somewhere we can contribute by sharing our knowledge and experience on regulations."
There are perennial suspicions in Japan of protectionist barriers erected by domestic industry. But fellow Dutch delegation member Justus Schoemaker said: "The Japanese are interested in general in innovative products and if it is something they don't have themselves, they are definitely interested."
Schoemaker says the Japanese government is encouraging developers to turn to foreigners to keep development of offshore wind to a strict timeframe, but even the new offshore tariff will not be enough to make projects with solely Japanese involvement viable "Companies will lose a lot of money if they do everything themselves. They need to start optimising and increasing efficiency," he says. This could be achieved through imports or even acquisitions, and if Schoemaker's hunch is right, Japan's years of being off the global radar for wind may now be numbered.