Japan set for offshore FIT – official

Japan is almost certain to introduce a stand-alone feed-in tariff (FIT) for offshore wind from 1 April, an official involved in the process has told Recharge.

A panel of experts was set up in November under Japan’s Ministry of Economy, Trade and Industry (METI) to assess the merits of a premium FIT to recognise the considerably higher costs of offshore wind and spur development.

Onshore and offshore wind currently enjoy the same FIT rate of ¥23.1 yen per kWh ($0.232/kWh) over 20 years.

The panel includes Takeshi Ishihara, the University of Tokyo professor who spearheaded a recently launched, METI-sponsored floating wind demonstration project in Fukushima prefecture.

Ishihara told Recharge the prospects of an offshore-specific FIT are “100% I think” but said the exact rate was still to be determined.

Other local sources have also told Recharge in recent weeks that the government appears determined to introduce a separate offshore FIT in April.

As part of the panel’s deliberations METI has published a series of capital-cost estimates for offshore wind projects.

The group has used data from Fukushima, as well as information culled from another floating demonstration test in Nagasaki prefecture and commercial offshore wind farms in other countries, to produce a range of different scenarios.

At present, the floating demonstration projects in Fukushima and Nagasaki — situated at Kabashima Island, in the remote Goto archipelago — feature just one turbine each.

Based on data from those sites, the study group estimated capital costs for a wind farm consisting of 20 to 50 turbines at up to ¥1.12m ($10,667) per kW. Under that scenario, it estimated annual O&M costs as high as ¥31,000 per kW.

The panel also produced three additional cost estimates by analysing data from developers in other countries.

First, the group envisioned a wind farm built within an enclosed harbour area. Under this scenario, it estimated capital costs at up to ¥450,000 per kW and annual O&M costs at up to ¥21,000 per kW.

However, such a scenario “is not sufficient to forecast potential commercialisation risks and facility utilisation rates,” METI acknowledged in a statement.

The group then looked at fixed-foundation wind farms already operating in Japan and other countries. Based on such data, it estimated capital costs ranging from ¥540,000 up to ¥590,000 per kW and annual O&M costs of ¥15,000 up to ¥30,000 yen per kW.

Finally, the group produced estimates for projects with larger turbines and considerably higher foundation costs. Under this scenario, it estimated capital costs at up to ¥790,000 per kW and annual O&M costs of as much as ¥23,000 per kW.

The panel believes that the estimates it produced for the second and third scenarios are most realistic, METI said.

However, the group acknowledged that costs could vary significantly depending on specific geographical conditions, as well as the kinds of turbines and foundations used.