Offshore Wind Power May Be the Key to Japan’s Energy Security

The Russia-Ukraine war has caused an increase of electricity prices in Japan and other countries, because Russia is one of the major energy suppliers in the world. On April 1, Japanese Prime Minister Kishida Fumio announced that Japan would not withdraw from its energy projects in Russia – oil and liquified natural gas projects Sakhalin-1 and Sakhalin-2 – despite the fact that Tokyo has imposed economic sanctions against Moscow for its invasion of Ukraine. Japanese Minister of Economy, Trade and Industry Hagiuda Koichi also explained that “We have interest in [these projects] and have secured long-term claimants… In the current situation of sudden energy price increases, we can procure energy at prices cheaper than the market price. This is extremely important for energy security.” Obviously, the Japanese government hesitates to abandon its economic cooperation with Russia owing to Japan’s energy security vulnerability.

The ongoing influence of the geopolitical crisis on Japan’s energy security is a clear indication that Japan needs to improve its energy sufficiency, but how can Japan pursue a self-sufficient and carbon-neutral energy mix? The introduction of offshore wind power in Japan might be an answer to this question.

In the Sixth Strategic Energy Plan, announced in October 2021, the Japanese government examined its energy policy progress in the decade after the incident at Fukushima Daiichi Nuclear Power Station and articulated Japan’s basic energy strategy to realize a carbon-neutral society by 2050. To achieve decarbonization in Japan, the Kishida government plans to facilitate renewable energy and describes the introduction of “offshore wind power” as a “trump card” (kirifuda). It is unusual for official government documents to use such a phrase, and it instantly raises a question: What is the potential and feasibility of introducing offshore wind power technology in Japan?

Previously, the Japanese government enacted the “Act of Promoting Utilization of Sea Areas in Development of Power Generation Facilities Using Maritime Renewable Energy Resources,” which was promulgated in December 2018 and officially came into effect in April 2019. The act aims to promote the utilization of sea areas for renewable energy power generation, especially offshore wind power, by creating a certification system and licensed use of designated maritime areas, while maintaining harmonization with local people as well as other related legal frameworks. With the enactment of the legal framework, some officials of the Japanese government argued that Japan should be able to become the world’s third largest offshore wind power producer, generating up to 45 gigawatts of power, equal to the electricity output of 45 nuclear reactors, in 2040.

Based on the act, the Ministry of Economy, Trade, and Industry (METI) and the Ministry of Land, Infrastructure, Transport, and Tourism (MLIT), designated several “promising areas” for introduction of offshore wind power and launched an auction to select a developer for a sea area of Goto city in Nagasaki prefecture in June 2020. As a result of the first auction, a consortium of six companies led by Toda Corporation was selected in June 2021 to build Japan’s first floating wind power farm.

Japan’s second offshore wind auction under the act was opened for bottom-fixed offshore wind projects in November 2020. The second auction covered four offshore wind zones. Three zones are located off Akita prefecture: Noshiro (Mitane town and Oga city), Yurihonjo City North, and Yurihonjo City South. The fourth zone is off Choshi city of Chiba prefecture.

As a result of the second auction, consortia led by Mitsubishi Corporation as the main stakeholder were selected in December 2021 to build offshore wind power operators in the three offshore wind power projects in Noshiro, North and South Yurihonjo, and Choshi. Mitsubishi’s rivals were stunned by the low tariff prices the Mitsubishi-led consortia had proposed in the auction: 11.99 yen (0.1 dollars) per kilowatt hour (kWh), 13.26 yen per kWh, and 16.49 yen per kWh. In short, the Mitsubishi-led consortia managed to dominate all three areas by promising the cheapest electricity price in each project.

Japan’s third offshore wind power auction, to select a developer for the Happo-Noshiro zone of Akita Prefecture, was publicized in December 2021. The application deadline for bids in the third offshore wind power auction was originally June 2022, but in March METI decided to withdraw the third auction, partly due to the outbreak of the Russia-Ukraine war. METI will resume the third auction after this summer.

Internationally, environmentalists have criticized Japan for lagging behind in the decarbonization process. Tokyo has been urged to promote renewable energy, especially offshore wind power, which could “unlock tremendous renewable energy potential” as recommended in a report by London-based climate data provider TransitionZero. Meanwhile, more and more of the world’s major wind power companies have been keen to invest in the introduction and development of offshore wind power farms in Japan. Scottish utility SSE PLC, one of the world’s largest offshore wind farm developers, decided to move to Japan in pursuit of business opportunities. German RWE Renewables, the world’s second largest offshore wind power company, also invested in development of Japan’s offshore wind power. Pattern Energy, which has the largest wind and renewable energy project in the United States, has cooperated with Green Power Investment and plans to develop offshore wind power in Ishikari city of Hokkaido prefecture.

One of the bottlenecks in introducing offshore wind power systems in Japan is how to transmit energy from offshore wind power plants to Tokyo and other major cities in the country. Since the lack of transmission capacity has been a hindrance to Japan’s offshore wind power policy, the Japanese government has decided to allocate 5 billion yen ($43.4 million) in this fiscal year’s supplementary budget with a view to facilitating research on developing undersea cables that would enable offshore wind operators in Hokkaido to provide energy to Tokyo and other areas throughout Japan.

In terms of Japan’s energy security strategy, the early introduction and operation of offshore wind power is desirable given Japan’s high dependence on energy imports. In particular, Russia’s invasion of Ukraine reconfirmed Japan’s energy insecurity; Russia accounted for about 3.6 percent of Japan’s crude oil imports as well as 8.8 percent of its liquified natural gas imports in 2021. Regarding this point, Hagiuda, Japan’s minister of economy, trade, and industry, stated, “Following the situation in Ukraine, we are facing an urgent need to accelerate the introduction of renewable energy as a home-grown energy source toward decarbonization. This is also vital in terms of ensuring energy security.”

From a strategic viewpoint, it is fair to argue that Russia’s invasion of Ukraine has encouraged Japan to speed up the early introduction of offshore wind power plants rather than the development of new nuclear reactors. Japan’s current basic energy policy includes the use of peaceful atomic energy, but the Russia-Ukraine war revealed the strategic vulnerability of nuclear power plants in the event of military emergencies. The introduction of hydrogen and ammonia energy generation is another promising alternative, but Japan had planned to cooperate with Russia for the joint production of hydrogen and ammonia energy. This is also a more distant prospect, as it will take time for Japan – or any country – to effectively utilize the technology allowing for hydrogen and ammonia energy generation.

Japan has the sixth largest exclusive economic zone (EEZ) in the world, and the potential for Japan’s offshore wind energy is extremely high. In theory, it is estimated that the total amount of annual electricity that could be generated by introducing offshore wind in Japan (3,460 terawatt-hours) could be over three times larger than the electricity Japan used in 2020 (905 TWh). Clearly, if it can be properly introduced, offshore wind power can be a solution to Japan’s energy insecurity due to the low energy self-sufficiency ratio and also help advance the realization of its carbon-neutral and nuclear-free energy mix in the near future.