Wind Energy in Japan

japan.jpgIn 2016, the total installed wind power capacity in Japan reached 3,234 MW, including 59.6 MW of offshore capacity. The annual net capacity increase was 195 MW. Total wind generated electricity during 2016 was about 5.3 TWh, which corresponds to 0.55% of the national electricity demand (920.1 TWh).

The signs of recovery from the strict Environmental Impact Assessment (EIA) Law are becoming ever more apparent. More than 11 GW of new wind farm projects are still suspended by EIA processes. Nearly 88% of the projects in planning are located in the Hokkaido and Tohoku regions. These regions have plenty of wind resources, but low population in these areas creates low electric demand and grid connection problems.

Policies Supporting Development

Japan adopted the FIT scheme to support the development of renewable energies, including wind power, in July 2012. The country’s former incentive programs were investment subsidies and renewable portfolio standards.

The current tariffs are 22 JPY/kWh (0.18 EUR/kWh; 0.19 USD/kWh) for wind power greater than or equal to 20 kW of capacity and 55 JPY/kWh (0.45 EUR/kWh; 0.47 USD/kWh) for wind power less than 20 kW of capacity. The premium tariff for offshore wind is 36 JPY/kWh (0.29 EUR/kWh; 0.31 USD/kWh). The above tariffs do not include the 8% consumption tax. The duration of the FIT is 20 years for wind, including small wind and offshore wind.

The tariff will be re-assessed every year based on the latest market experience in Japan. METI drafted a modified tariff for wind and solar power in 2016, which would reduce the tariff for land-based wind power each year until FY 2019. According to the draft, the FIT for land-based wind would be reduced 1 JPY/kWh (0.0081 EUR/kWh; 0.0086 USD/kWh) every fiscal year, from 22 JPY/kWh (0.18 EUR/kWh; 0.19 USD/kWh) in FY 2016 to 19 JPY/kWh (0.15 EUR/kWh; 0.16 USD/kWh) in FY 2019. The tariff for offshore wind would maintain a constant rate of 36 JPY/kWh (0.29 EUR/kWh; 0.31 USD/kWh).

Projects that are delayed by grid issues receive special remedial measures. Japan offers a new tariff for repowering wind power, which is 3 JPY/kWh (0.024 EUR/kWh; 0.026 USD/kWh) lower than the tariff for large wind power. METI finalized the new tariff for FY 2017 after reflecting upon public hearing results in March 2017.

Renewable Energy Targets

Following the publication of the Fourth Strategic Energy Plan, the Ministry of Economy, Trade and Industry (METI) issued the “Long-term Energy Supply and Demand Outlook,” including a draft for the power source mix in 2030.

The projected share of wind energy in the 2030 power source mix is 1.7%, which corresponds to 10 GW of capacity including 0.82 GW offshore wind power. This means only 7 GW of new installation are required to meet the target in the next 14 years.