The government is expected soon to begin inviting applications for operating offshore wind power plants in designated areas in Chiba and Akita prefectures.
The project will serve as a test for the technological development and profitability of wind power generation in Japan, as the country lacks experience in the field.
Wind power generation is an important part of efforts to popularize renewable energy use, and is expected to play a role in Prime Minister Yoshihide Suga’s key policy goal of achieving net zero greenhouse gas emissions in Japan by 2050.
There are four areas designated under related legislation, with one located off the coast of Choshi, Chiba Prefecture; one off the coast of Noshiro, Mitane and Oga in Akita Prefecture; and two off the coast of Yurihonjo, also in Akita Prefecture.
It will be the first time in Japan that a wind turbine would be built directly on the ocean floor in a shallow area. The so-called bottom-mounted offshore setup has been successful at foreign wind power plants.
The government plans to publish soon its plans for accepting tenders, such as requirements for applications.
The government laid out a plan in July to achieve a power generation capacity of 10 million kilowatts, equal to that of 10 nuclear reactors, with offshore wind power plants by 2030. The target is part of efforts to make offshore wind power the country’s main energy source.
Many hope that such efforts will lead to a boost in local economies near plants, due to demand for plant maintenance and port facility improvements needed to allow construction.
Japan is planning to give up to 30 years of exclusive use to one operator per designated area.
While the government will allow applicants up to around nine and a half years between selection and starting power generation, an industry ministry official said that plans to start earlier will be a plus in evaluating tenders.
Dozens of companies such as power utilities, general trading houses and oil wholesalers have launched consortia to prepare for applications.
But there are also concerns over making bids to operate offshore wind power plants.
A senior official from a major power utility expressed worries about whether the project is “actually profitable in the long run,” noting that a full-fledged wind farm requires several hundred billion yen in construction costs to maintain large turbines and procure specialized vessels and storage batteries.
The government’s feed-in tariff scheme is expected to apply to electricity generated in the designated areas. But the proposed pretax purchase price of ¥29 per kilowatt calculated in September is “unexpectedly low,” according to a company considering submitting an application.
There are other major technological challenges to making wind power the primary source of energy, such as the construction of power lines to ensure stable supply of electricity to urban areas, as well as the development of floating wind turbines that can be set up in deep sea areas.
Meanwhile, informed sources said Thursday the government and the ruling camp are considering new tax breaks to promote investments aimed at reducing greenhouse gas emissions.
The tax breaks are expected to cover investments to build production facilities for lithium-ion batteries, indispensable to the spread of electric vehicles and renewable energy sources, according to a draft outline of fiscal 2021 tax system reform measures.
These tax incentives are also likely to be provided to companies making investments to build production facilities for generators used in offshore wind power projects and for power semiconductors that help reduce energy consumption, the sources said.
The ruling camp, led by the Liberal Democratic Party, aims to include the tax incentives for decarbonization investments in its tax system reform proposals to be compiled toward year-end.
According to the draft outline, tax incentives are likely to be granted to support capital spending programs certified by the government as effective in reducing greenhouse gas emissions, the sources said.
The special treatment will take effect after certified programs are implemented. The government will grant tax cuts or special depreciation allowing greater-than-usual deductions from taxable income.