Present Status and Future Prospect of Wind Power Generation in Japan

Izumi Ushiyama Prof. Emeritus, Ashikaga Institute of Technology

Abstract Wind power new installation in Japan has increased gradually. 195MW has

installed in 2016 and it is 20% smaller than 244MW in 2015. Several large wind farms have finished long EIA process and started operation. The cumulative installation has reached 3,038MW at the end of 2016. It produced about 5,300GWh/year which is about 0.5% of electricity supply in Japan in 2016. More than 11GW of new projects are still suspended by long EIA process now as shown in Table1. 88% of planning projects locate in northern part of Japan; Hokkaido & Tohoku region, which have plenty of wind resources and have low population which brings grid connection problems. Most of projects at EIA latter stage have grid connection permit and FIT approval at 22JPY/kWh, and they shall be in operation within 4 years. The other planning projects need grid connection permission, therefore, their operation dates have some uncertainty. Offshore wind power reached 59.6MW with 28 turbines. MHI 7MW floating turbine was added as second turbine at Fukushima FORWARD project. The 3rd Hitachi 5MW floating turbine has started official operation in Mar. 2017.

Future TargetJapanese government estimates Japanese future energy plan called “Long-term

Energy Supply and Demand Outlook” every 3 years. The latest one was published in July 2015, so called “Energy Mix Plan”. Wind power has very small role, 1.7% electricity supply share in 2030 in this plan. It is 10GW, including 0.82GW offshore wind power, at capacity and it means only 7GW new installation for coming 14 years.The energy policy in Japan is still in confusion now. Some people try to restart nuclear power plants, the other people aim to build new coal fired fossil power plants using cheap Australian coal thinking avoid from “Middle East trouble risk”. Solar power new installation stalls by rapid reduction of FIT price. But, the future of wind power in Japan is in the fog now. JWPA makes large efforts to improve this situation according to the “JWPA WindVision”.

JWPA issued “JWPA WindVision Report", on 7 March 2016 by JWPA http://jwpa.jp/page_216_englishsite/jwpa/detail_e.html

Table1. Wind power projects in JapanStatus MW

In operation (at the end of 2016) 3,234 MW

Under construction (in operation by Mar.2017) 144 MW

Planning EIA Latter stage (Draft EIS)

Middle Stage (Scoping)

Primary stage (Consultation)

3,770 MW

3,510 MW

3,213 MW

Pre-EIA process * 1,596 MW

Total Planning 12,089 MW

Total 15,467 MW

* Offshore projects at Pre EIA stage or free from EIA.

Feed in TariffThe tariffs are re-assessed every year based on the latest market experience in

Japan. Japanese government wants to restrict the increase of electricity fee by FIT, mainly caused by solar power, therefore they ask Japanese renewable energy industry to achieve cost reduction. The FIT prices shall decrease gradually in future.Japan’s Ministry of Economy, Trade and Industry (METI) offered modified prices to buy electricity from wind and solar under the country’s feed-in tariff system over the three years until 2019. It will be finalized after reflecting the public hearing results March 2017.

As for wind power, future purchase prices are set lower 1JPY/kWh per year for onshore wind. Price for offshore wind is maintained at the same 36JPY/kWh.- METI offers prices for coming 3 years. The price for large wind power shall be

gradually lowered from 22JPY/kWh in FY2016 to 19JPY/kWh in FY2019. The future price for onshore wind shall be reduced 1PY./kWh every year.Some special remedial measures are taken for the projects delayed by grid issues.

- The price for offshore wind power shall be maintained 36JPY/kWh for FY2019.- Price for repowering is newly offered. It is set at 3JPY/kWh lower than large wind

power price.Meanwhile, the approval for FIT for wind power will be done at an earlier stage

than before. Now FIT will be approved at the middle of the EIA process (Scoping stage, 2-3 years from project start). These changes in the system can significantly improve the predictability of wind power business profitability in Japan. (Unfortunately, “unlimited curtailment by grid issue”, another problem, becomes the new hurdle against wind power development in Japan now.)

Table 2 Feed in Tariff for wind power in Japan (Draft, without vat)FY2016 FY2017 FY2018 FY2019

Onshore (>20kW) 22JPY/kWh 21JPY/kWh 20JPY/kWh 19JPY/kWh

Repowering - 18JPY/kWh 17JPY/kWh 16JPY/kWh

Offshore 36JPY/kWh 36JPY/kWh 36JPY/kWh 36JPY/kWh

Small (20kW<) 55JPY/kWh 55JPY/kWh 55JPY/kWh 55JPY/kWh

　http://www.meti.go.jp/committee/chotatsu_kakaku/pdf/028_02_00.pdf

　http://www.meti.go.jp/committee/chotatsu_kakaku/028_haifu.html

Grid restrictions“Priority access for renewable energy ” is still “pie in the sky” in Japan now. The

location mismatch of wind resources and electricity demand in Japan causes grid connection problems. The northern area (Hokkaido & Tohoku) have most of wind resources in Japan, but, their population are small, and their grid infrastructure are restricted for wind power.

Tohoku Electric Power Co. announced to stop new requests for grid connection at northern 3 prefectures (Aomori, Iwate, Akita) in 2016. The rumor said that the new large coal fired fossil power plant construction plan at Akita reserved grid line capacity.Hokkaido Electric power Co. ask wind power developers to set large scale battery at wind farm to stabilize the fluctuation of output.

Japanese wind power industry has claimed about such severe deal against wind power development. METI mediated and both electric power companies agreed to make improved plan. Tohoku Electric Power Co. start re-estimation of grid capacity and the proposed wind power developments are allowed to get 22JPY.kWh FIT approval. But, this re-estimation needs one and half of years. As for Hokkaido, the electric power companies re-estimated the grid capacity and accepted to switch the battery location from wind farm sites to substations at grid lines.

The cost shall be shared by the wind power developers jointly. New 635GW capacity is offered without battery on 14 March 2017, and 652.58MW with 79 projects are requested (more than 10 times). Additional 400MW with battery shall be offered additionally soon.

Another problem is “Unlimited curtailment by grid issue” without compensation. Current Japanese Electric Power system rule allows Electric power companies to do it when renewable energy rate reaches a certain ratio. Hokkaido & Tohoku Electric Power Co. announced it in 2016, and Kyushu & Shikoku Electric Power Co. announced it in Mar. 2017. The curtailment rates shall be estimated as lesser than 30% at Hokkaido & Tohoku, and 10% at Kyushu & Shikoku. Formerly, the curtailment

was limited 30 days per year, and if it exceeds the limit, the Electric power companies should pay compensation money for it.This unlimited curtailment means profitability uncertainty at wind power business, so, it becomes the new hurdle for getting development fund from investors.

There is only one good news. Eurus Energy Holdings has announced to start construction for new local grid line at Norther Hokkaido from FY2019. It will start operation in 2022, and it enables several hundred MW of new wind power installation at Norther Hokkaido.

Offshore Wind Power Development By the end of 2016 Japan has 59.6MW of offshore wind power, including two 2MW

and one 7MW floating wind turbines (Table3). MHI ‘s 7MW turbine on the semi-sub floater started operation at FukushimaFORWARD project as second turbine as shown in Fig.1. The3rd one, Hitachi 5MW turbine on the advanced spar-type floater has anchored in July 2016. It has started official operation in March 2017 as shown in Fig.2.

2MW floating turbine at Kabashima in Goto Islands, Nagasaki Pref. was granted to Goto city, it was moved about 10km southwest to neighbor larger island Fukuejima, it was re-connected to the grid line and started commercial operation in Apr. 2016 (Fig.3). It became the 1st and only offshore wind project that can enjoy offshore wind FIT 36JPY/kWh in Japan.

Table3 Offshore Wind Power Experience in Japan (at the end of 2015)Type Location Distance

（km）

Depth

（m）

Rated

（MW）

No. of

WTG

Total

（MW）

Start

operation

Fixed

Hokkaido Setana Port 0.7 13 0.6 2 1.2 Dec.2003

Akita Akita Port 0.1 - 3.0 1 3.0 Feb.2015

Yamagata Sakata port 0.05 4 2.0 5 10.0 Jan.2004

Ibaraki Kamisu 0.04

~0.05

4 2.0 7 14.0 Feb.2010

Kamisu 4 2.0 8 16.0 Feb.2013

Chiba Choshi* 3.1 12 2.4 1 2.4 Mar.2013

Fukuoka KitaKyushu* 1.4 14 2.0 1 2.0 Jun.2013

Floating

Nagasaki Fukuejima 5.0 100 2.0 1 2.0 Apr.2016

Fukushim

a

Iwaki city

Naraha*

20 120 2.0

7.0

5.0

1

1

(1)

2.0

(+5.0)

Dec.2013

Mar.2016

2017

Total 28 59.6

*National projects （）: Under commissioning/construction

Fig1. Mitsubishi 7MW floating offshore wind turbine, Courtesy of Fukushima FORWARDFig2. Hitachi 2MW floating offshore wind turbine at Fukushima, photo by T.Nagao

There are further 2,486MW of offshore wind power projects currently under planning (Table4). The total of in operation and at planning exceeds 2.5GW now. Several projects shall start construction within a couple of years. Yasuoka project stepped into Draft EIA stage in Mar. 2017, so, it might be able to start construction in 2018. As for jack-up ship, Japanese construction company Penta Ocean Co. has announced to build their own jack-up ship in 2016.

Table4 Offshore Wind Power under planning in Japan (at Mae. 2017)Type Location Area WTG

(MW)

No.of

WTGs

Total

（MW）

Start

Operation

EIA

Status

Fixed

Hokkaido Wakkanai port Port 10 Pre EIA

Ishikari new port Port 4.0MW 26 104 2020 Draft EIS

Aomori Mutsuogawara port Port 2.0MW 40 80 2018~ Draft EIS

Akita Noshiro port Port 3.3-6.0 20 100 2021 Scoping

Akita port Port 3.3-6.0 14 70 2022 Scoping

Akita North Gen. 3.3-5.0 120 455 2023 Scoping

Yurihonjo Gen. 560 Pre EIA

Yamagata Sakata port Port 15 Pre EIA

Ibaraki Kashima port1,1st Port 5.0MW 20 100 Free

Kashima port1,2nd Port 5.0MW 5 25 Free

Kashima port2 Port 5.0MW 25 125 Free

Fukuoka Kitakyushu port Port 228.8 Pre EIA

Kitakyushu Gen. 300** Pre EIA

Niigata Iwafune, Murakami Gen. 5.0MW 44 220 2025 Pre EIA

Yamaguchi Yasuoka, Shimonoseki Gen. 4.0MW 15 60 Draft EIS

Floating

Fukushima Iwaki city Naraha* Gen. 5.0MW 1 5 2017 Free

Fukuoka Kitakyushu* Gen. 2 7.5 2018 Free

Nagasaki Fukuejima Gen. 2.0-5.0 10 21 Consulting

Test

Field

Niigata Awashima Gen. Free

Nagasaki Kabashima Gen. Free

Total 2486.3

*National projects **Estimated by JWPA

Sea area in Japan is categorized into two areas which are “Port associated area” and “General common sea area”. Japanese Ministry of land, Infrastructure, Transport and Tourism (MILT) has amended “Port and Harbor Law” for promoting offshore wind power development at port associated area in May 2016. This modification is bundled with the promotion of port abilities for sightseeing cruisers. -To allow 20 years occupation of the designated water zone in the port area for developers-To settle the bidding system of offshore wind power development in the port areaThis amendment reduces business risk for offshore wind power development at port associated area. 20 years is too short for the full business period (from research, construction to decommission). It is adopted as a compromise, since there are no experience for fixed term more than 20 years in Japanese law system. Developers

can offer the occupation rights again. Therefore this restriction will not harm the projects.Port area has a good infrastructure for construction and grid connection. Therefore, most of offshore wind power projects are planned in port area in Japan now.

Kitakyushu city made offshore wind bidding according to this new rule in August 2016. Local company group (including J Power & subsidiary of Kyushu Electric Power Co.) won the bidding in Feb. 2017.As for “General common sea area”, there is no law/regulations. It is so-called

Thomas Hobbes‘s “the war of all against all”, therefore, there is a huge business risk for projects at “General common sea area” now. Japanese Cabinet in charge of Ocean Policy and MILT try to improve it, but, it will need time.

ConclusionJWPA promotes wind power development in Japan and makes efforts to achieve

our target 36.2GW towards 2030.

We think the difficulties in Japan shall get lower around in 2020 at several fields.1. The unbundling of electric power generation, transmission, distribution shall

applied for Japanese electric power system in FY2020.The new grid operation company might be able to use Japanese grid system inter regionally than now.It enables improvement at wind power grid connection, especially at the good wind resource region (Hokkaido & Tohoku).

2. The construction cost (materials, machines, labors) in Japan is very high due to the big profitable works(demand) for Olympic game preparation in 2020.If the Olympic game is over, construction companies become hungry and they offer more moderate price for wind farm construction.The low profitability at Japanese wind power business is partially caused by the low capacity factor with low average wind speed (except Hokkaido and Tohoku).The average capacity factor in japan is about 20%, it is lower than world average.Of course, there are lots of Class Ⅲ high performance turbines for low wind speed in the world, but we have typhoon, so, we cannot apply them in Japan.Vestas and Siemens have announced at WindExpo2017 Tokyo to develop anti-typhoon class new wind turbine for Japanese market and they shall be in the business in 2019.Therefore, the capacity factor in Japan can be improved by new turbines after

2020.3. Japanese MILT intends to extend their new interests at offshore wind power

business. They will take initiative to enhance base port infrastructure in time.And, new law for “Offshore wind at General common sea area” shall be settled by

2020, which reduce the business risk at offshore wind power business in Japan.

4. Japanese government will not be able to make drastic change at their energy policy (especially for nuclear power) in near future, such as at next Energy Mix Plan announcement in 2018. Therefore, the uplift for the wind power target in Japan might postponed to next to next Energy Mix Plan in 2021.

5. Eurus Energy has announced that they start construction for the local grid line extension at northern Hokkaido in FY2018 and it will start operation in Oct. 2021. Then, they can enjoy more than 600MW of new grid connection.