Led by market-shaping plans for over 1GW of offshore wind projects announced in recent months off Japan and a highly anticipated bid in the works with Equinor and J-Power for the island nation’s first industrial-scale sector auction, JERA is putting sea-based wind at the heart of its energy transition, president Satoshi Onoda tells Recharge.
JERA, Japan’s biggest power company – which is responsible for some 10% of the Asian island nation’s emissions – set out its energy transition vision in 2015 when it was founded as a joint venture of Tokyo Electric Power Co (Tepco) and Chubu Electric Power: to “spark a clean-energy economy” in the country by accelerating the expansion of its renewables portfolio toward 5GW by mid-decade.
Much of the hope of reaching this target, as it emerged over the past five years, has come to be pinned on offshore wind, with JERA’s experience participating on pioneering industry projects off the UK, including Gunfleet Sands, and Taiwan, at Formosa 1, informing its strategic approach to its home market, which the government aims to grow to 10GW by 2030 and up to 45GW by 2040 with a combination of fixed and floating turbines.
“Concerns about global warming have been growing since JERA was founded around 2015, and my sense is that decarbonisation is now an essential strategy for global companies. Because JERA is the largest power producer in Japan [with significant CO2 emissions], it is also in a position to lead decarbonisation in Japan,” president Satoshi Onoda told Recharge in an exclusive interview.
“The vision to be achieved by 2025 [will be based on] accelerated investment and initiatives in renewable energy,” he added. “Our equity capacity in renewable energy has now reached 1.2GW and we are working to reach 5GW by 2025.”
Offshore wind, Onoda underlined, would be central in this transition strategy, pointing to JERA’s plans for a 600MW project off Japan’s northern Aomori Prefecture and another 525MW array, complete with battery storage, off Ishikari Bay in Hokkaido, as early examples of its aspirations in the sector.
“As for renewable energy, a pillar of our approach, we believe it is particularly important to develop large-scale offshore wind farms and to support the adoption of batteries. For domestic offshore wind power generation, we will bid in Akita Prefecture and have begun the environmental assessment process in Hokkaido and Aomori,” said Onoda, who recently hired industry veteran Nathalie Oosterlinck to head it global offshore wind business.
Floating projects will be key, he continued, given that the narrow continental shelf around Japan means deep waters will dominate the offshore acreage eventually developed by the country – a prospect coming into focus anew, after the pioneering and soon-to-be-decommissioned Fukushima Forward demonstration array last decade, via the landmark 21MW pilot tender of the Goto Islands.
“Floating offshore wind is a promising technology for Japan because of the deep waters that surround the country,” Onoda stated, noting that a joint venture it signed with French floating wind platform designer Ideol and compatriot government body Ademe last June would “enable us to get out ahead of other companies in Japan in developing floating offshore wind projects; taking part in the development of European-based floating offshore wind projects will enable us to learn the technology and gain expertise”.
He added: “We are continuing to discuss the establishment of a company with Ideol and Ademe. We initially aimed to do so in 2020, but more time has been required. Talks among the three companies are positive, though, and we expect to establish the company soon.”
The tie-up with Equinor and J-Power, being looked to by JERA to give it a “foothold” in the domestic offshore wind play, said Onoda, is based on an industrial “affinity” between the partners in the region.
“One reason why the three companies formed a consortium was the affinity between each company's policy of developing... projects independently as a power generation company and of owning and operating these projects over the long term,” he said. “In addition, all three companies have a track record of constructing and operating offshore wind farms overseas.
“Synergies between J-Power, with its track record in both onshore and offshore wind power generation in Japan, and JERA, with its track record in offshore wind in Taiwan – whose meteorological and oceanographic conditions are similar to those in Japan, enable us to create more feasible regionally-based offshore wind power projects, and leveraging Equinor's expertise in constructing the world's largest offshore wind power projects makes our consortium more competitive in tenders.”
Onoda emphasised that while the national offshore wind capacity targets were driven by “high hopes” within government and industry, future expansion of generation “requires designing a system that reduces business risk for operators, such as the adoption of the central method, [and that] in areas where offshore wind power projects are located there is also a need for regional development measures that ensure such projects stimulate the local economy”.
JERA’s wider energy transition plans, detailed late last year as part of its target to reach net-zero emissions by 2050, are built around a strategy to combine production from renewable energy sources and zero-emission thermal power generation.
“Adoption of renewable energy is supported by thermal power generation capable of generating electricity irrespective of weather conditions,” said Onoda. “We will promote the adoption of greener fuels and pursue zero-emission thermal power that emits no CO2 during power generation.”
The group’s decarbonisation “road map”, includes plans to begin piloting co-firing of ammonia and hydrogen with fossil fuels, with a demonstration project at the Hekinan thermal power station in Aichi Prefecture “during the first half of the 2020s”.
Beyond its Japanese interests, Onoda said, JERA would use the road map to tailor emissions reduction strategies in its international markets.
“Because the energy situation differs in each country and region due to factors such as regional transmission lines and pipelines and the types of renewable energy with the potential for adoption, we will work with stakeholders on a country and regional basis to establish these roadmaps,” he said.
“We have already developed a roadmap for our business in Japan and will extend this approach to other countries and regions.”