Wind power on verge of taking off

by Kazuaki Nagata

Staff Writer

Japan hasn’t seen an appreciable increase in wind power in the past few years despite the start of the feed-in tariff system designed to boost renewable energy, but it still has potential and the market will grow in the next several years.

That appears to be the consensus view of many people in the wind power industry participating in the Smart Energy Week 2014 exhibition that kicked off Wednesday at Tokyo Big Sight.

Tokyo-based Looop Inc., which has been selling solar panels, is planning to enter the wind power market by selling small-scale turbines.

Yasuhiko Watanabe, sales and public relations manager at Looop, said that although the solar panel sector has grown rapidly since the launch of the feed-in tariff in 2012, that rise is expected to slow down because the government lowered the purchase price for solar power last year and it is planning to drop it further.

Under the feed-in tariff system, electric utilities are required to buy all electricity produced by companies and households via renewable energy sources at a rate that will remain set for a specific number of years.

The system attracted a massive amount of investment in solar panels as the rate was higher than many experts had expected and solar panels are easier to set up than other renewable power facilities.

The small-scale wind power price is set at ¥55 per kilowatt-hour for 20 years. The small-scale wind generators are those whose windmill diameter is shorter than 7 meters with generation capacity of 20 kw or lower.

Experts have said that Japan’s potential in wind is big, so wind will be an important player in the nation’s efforts to increase use of renewable energy.

“Sooner or later, we are going to see an increase in wind power. It will be too late to enter the market once it has already started to grow,” said Watanabe.

Wind power has barely gotten off the ground, Watanabe said, because installation costs for small-scale generators are still too high to be profitable.

But he said Looop has built up the know-how to provide quality and reasonable renewables through selling solar panels, which will help it develop profitable small-scale wind farm businesses.

The firm said it aims to provide wind turbines for investors to pay off the initial installation cost in about seven years.

Mizue Yugawa, a spokeswoman at Tokyo-based Zephyr Corp., a seller of small-scale wind farms, said it is true that investment in this sector is not yet profitable.

But “we are getting a lot of inquiries. The price of solar power is going to drop, so they are interested in the next energy (source to invest in),” she said.

She said wind turbine makers will be making more efforts to lower the manufacturing cost and this will increase investment opportunities.

The Japanese wind power market is starting to attract attention from overseas.

Maurizio Colombo of Spanish company Ennera, which sells small-scale wind farms, said the firm is thinking about entering the Japanese market because of the benefits of the feed-in tariff.

“My feeling is that there is large interest in the market . . . the beginning (of the spread of renewables in Spain) was similar to what I am now seeing here,” with a lot of interested people, he said, adding that his firm is looking for distributors in Japan.

Hopes are high for large-scale wind farms as well.

Keisuke Murakami, an official at the Agency for Natural Resources and Energy, said in a keynote speech that Japan will be cultivating offshore wind farms whose power generation potential is said to be 10 times that of solar power, while General Electric Co. said it started providing wind turbines Wednesday for Japan for the first time in about eight years.

GE, which had supplied about 300 wind turbines in Japan as of 2006, resumed the sales, since the demand for renewable energy sources is growing due to the feed-in tariff.

Kenichi Fujita, senior executive operating officer at Siemens Japan’s energy sector, also said the Japanese market has become attractive since the start of the feed-in tariff and the firm has been involved with more wind power projects.

While the first boom has been solar, “we think that the second boom is going to be wind,” he said.

As Siemens is the world’s largest supplier of offshore wind turbines, Fujita said the firm especially has high hopes for development of offshore wind farms in Japan.

But there are obstacles.

For instance, environment assessments to build large-scale wind farms take about three years, so the building process is time-consuming.

Also, places suitable for wind farms tend to be rural, so power grids are not connected or are too weak to send power to metropolitan areas.