Marubeni faces ship shortage, grid issues in offshore wind push

by

Bloomberg

Marubeni Corp. is planning to develop more than five times the offshore wind power capacity currently installed in Japan as it moves aggressively into a poorly developed area of the country’s renewable energy market.

“If you want to do large-scale projects, it’s offshore wind that has the most potential” among clean energy sources, Tomofumi Fukuda, who oversees power projects in Japan for the Tokyo-based trading company, said in an interview.

Marubeni will need to overcome several challenges for its plans to install more than 270 megawatts of offshore wind power capacity, among them a dearth of ships outfitted to install turbines off the coast. Japan had 52 megawatts of offshore capacity at the end of 2014, a fraction of the 2,715 megawatts onshore, according to Bloomberg New Energy Finance data.

“The fundamental problems are the lack of vessels and experience” in offshore engineering, Fukuda said. “These are Japan’s biggest weaknesses that need to be overcome.”

Japan’s 30,000 km (18,600 miles) of coastline offer a tantalizing opportunity for the resource-poor country to take advantage of an abundance of wind energy sitting at its doorstep. But to do that, Japan must first ratchet up its engineering capabilities.

Marubeni is leading a government-funded demonstration project using turbines that float in the waters off Fukushima, the site of the 2011 nuclear disaster.

The trading house is also planning to build wind farms with bottom-fixed turbines, a technology widely used in Europe. Marubeni and partners plan to build two wind farms with a combined capacity of 145 megawatts off the coast of the Sea of Japan near Akita Prefecture.

Marubeni also has plans for a 125-megawatt station off Ibaraki, and is considering one other location for the technology, Fukuda said, declining to give details.

European countries are leading the way in offshore wind development. The U.K. and Germany had 4,228 megawatts and 1,516 megawatts in 2014 respectively, according to London-based BNEF.

Japan’s offshore wind capacity will expand to 486 megawatts by 2020, BNEF estimated in a September report.

Most of the operating turbines are within striking distance of the nation’s coastline, making it easier to build and maintain the facilities.

Japan has 915 megawatts of offshore capacity planned, according to the Japan Wind Power Association.

The technology got a boost last year when the government began offering a tariff for purchases of offshore wind power that is 64 percent higher than the onshore wind tariff.

But even the higher rate may not be enough to cover the cost. The tariff was set at ¥36 (30 cents) per kilowatt-hour, taking into account the capital costs — surveys, design, equipment and construction fees — of ¥565,000 per kilowatt. Marubeni estimates capital costs of ¥600,000 per kilowatt, Fukuda said.

Negotiations with the local fishing industry are also crucial, the official said.

Moreover, installation vessels will need to accommodate larger turbines and other equipment because developers are aiming for larger offshore wind farms than found elsewhere, he said. Whether the more economical option is to charter or build suitable vessels is also yet to be decided by Japan’s wind industry, Fukuda added.

Marubeni is also working with partners including Tohoku Electric Power Co. to strengthen grid capacity for the two Akita wind stations so the region can accommodate as much as 600 megawatts of wind capacity, according to Fukuda.

The project is supported by the government.

  • Starviking

    Hmmm. Not enough ships, the generous rate for offshore wind energy not high enough, and they have to negotiate with the fishermen. Does not sound like a plan for success at present.