Offshore wind developers are urging the Japanese government to improve auction terms and offer financial support to help the sector grow, industry sources told Reuters.
Japan aims to build 10 gigawatts (GW) of offshore wind capacity by 2030 and expand it to between 30 GW and 45 GW by 2040. However, rising costs and global supply chain delays have caused some major firms to rethink their involvement.
To revive interest, the Japanese government is considering extending project durations from 30 to 40 years. It is also weighing changes to allow non-Japanese vessels to work in offshore wind zones, sources said.
Industry groups are pushing for more stable, multi-year auctions and long-term power purchase agreements (PPAs). They also want subsidies or tax breaks for large industrial users to encourage them to sign deals with wind developers.
Some companies have already scaled back plans. Mitsubishi Corporation said it is reviewing its offshore wind projects in Japan due to “material changes in the macroeconomic environment.” The company had won rights to develop three sea areas in a 2021 auction but cited inflation, a weaker yen, supply chain problems, and higher interest rates as reasons for the reassessment.
Global offshore wind leader Ørsted has also reduced its focus on Japan. The company said last year it was “deprioritising development activities” in the country. In May, Ørsted warned that the global outlook for offshore wind remains tough due to rising costs and ongoing challenges.
The Japanese government has held three offshore wind auctions so far. Industry officials hope that improved terms and support measures will attract more investment and help Japan meet its renewable energy goals.