David Foxwell reflects on the potential for offshore wind in Japan and a number of countries in the Asia Pacific region
Law firm Linklaters published an analysis of the Japanese offshore wind market this month and concluded that the market in the country is approaching a tipping point. That may be, but I would argue the Asia Pacific region as a whole is approaching a tipping point when offshore wind will take off, as it has in the last 12-18 months in the US.
Japan wants to decarbonise its economy by 2050 and offshore wind power is expected to play a key role. However, as Linklaters noted, historically wind power developers faced challenges in the country, such as geography, climate conditions and legal/regulatory issues.
Now, however, the combination of new technology such as floating offshore wind turbines and stronger regulatory and policy support looks likely to unlock the offshore wind market in Japan.
Japan needs around 10 GW of offshore wind capacity to help meet the government’s 2030 target. The Japan Wind Power Association predicts 6 GW of fixed turbine windfarms and 4 GW of floating turbine windfarms by FY2030.
The fact that floating wind technology is becoming commercially feasible will be especially important in Japan, as are regulatory and policy changes made in 2018 to address the cost concerns, legal uncertainties and grid availability. As Linklaters reported, the government is also pushing hard to halve the time required for environmental impact assessment – which was said to be taking at least four years. Japanese companies have become important investors in the offshore wind market in Europe and are using their investments as ‘learning experiences’ with the domestic sector in mind.
But it is not just Japan reaching a tipping point. Other tipping points are approaching in countries such as South Korea and of course Taiwan is already well ahead of the pack.
As I highlighted here, research from Wood Mackenzie suggests the Asia Pacific region’s offshore wind capacity will rise 20-fold to 43 GW by 2027 and future prices will be competitive with conventional thermal energy.
As Linklaters managing partner in Tokyo and one of the authors of report John Maxwell noted, “With increasingly rapid technological advancement, it seems inevitable that clean energy will achieve grid parity in many previously unimaginable places in the world.”
Taiwan and of course China lead the way in the Asia Pacific region at the moment, but just as Japan may be reaching a tipping point, so too will other countries in the region.
Massive investment will be required, but much of the leg work on technology development and cost reduction has already been done elsewhere, and with floating wind costs likely to fall steeply too, opportunities are likely to open up at a fast pace once the tipping point has been reached.