FACE TO FACE | Choshi, the first project off Japan that Orsted intends to build together with Japanese power company TEPCO after signing an MoU last week, is slated to have a capacity of several hundred megawatts or more, the Danish utility’s general manager for the Asia-Pacific region, Matthias Bausenwein, tells Recharge.

Japan has tested offshore wind for several years now with pilot turbines. Why is now a good moment to start large-scale projects?

We have always actively monitored Japan. But we also believe that the offshore wind market in Japan is now gaining momentum. We have seen some commitment from the government to deploy renewables and also offshore wind. They have passed a legislative foundation for offshore wind just recently. And there is also the basic energy supply plan from last summer, from July 2018. The Japanese government targets 10GW [of combined] offshore and onshore wind capacity by 2030. They have a target to reach a 22-24% renewables share by 2030.

There is some momentum also with the passing of the offshore wind far-shore law. And another basic driver is that there are strong fundamentals for offshore wind in Japan. We know that there is only limited abilities for onshore [wind] and PV due to the geography and topography. Load centres are close to shore. So, I think, it is the right moment to become more active.

The first project in your cooperation with TEPCO is slated to be Choshi. TEPCO has earlier said that would be a bottom-fixed project. Is the site shallow enough for that?

I think, we have still a quite good potential for bottom-fixed off wind in Japan, and the Choshi project is also supposed to be one. In that area, it is clearly a bottom-fixed area.

How deep is the water at Choshi?

There are different areas. We are investigating a bit more there, but it [the water depth] is definitely under 50 metres.

What size could you be aiming for at Choshi and in what time frame do you think the array could be commissioned?

It is too early to say without further diligence. We need to look deeper into it. It depends a bit on the regulatory regime. But there is no clarity on that yet, or on the planned auctions. This will also influence the size of the project.

We are aiming to build large-scale offshore wind. We’re not talking about a demonstration project site, but rather several hundred megawatts, or a bit more. That is our aim in general, to bring wind power to a market like Japan in a way that it can really contribute to the energy mix. Load centres are close to the shore, but still offshore wind needs a meaningful size.

If everything goes according to plan, when do you think Choshi could be commissioned?

That is very difficult to say now, [we need to carry out] further development work. But also, there are a couple of permits still to be achieved. Without any clarity of when the first auction could actually happen – and this is all in the making now in Japan, and also still going through the permitting process -, it is very hard to say.

Do you know whether the auction will be for an offshore zone, as in the case of the Dutch auctions, or would it just be for a certain volume?

The ministry of economy, trade and industry (METI) has outlined that there will be zones, which are explicitly designated for the development of offshore wind. But I don’t expect a Dutch model there. It should be zones that are somehow further developed by the parties, not just pre-developed sites with a limited scope, but really full scope, including some transmission. The industry basically awaits further details on these zones to be assigned by the ministry, and also more details on the foreseen auction design, how this is being allocated. It is fair to assume that Choshi should be one of these zones.

Are TEPCO and you the only companies developing at Choshi, or are there other companies looking into that area as well?

I am not aware in that specific area of any other companies developing anything.

Do you think TEPCO will have enough money to spend on offshore wind development in coming years, given the company’s massive commitments for nuclear decomposition and decontamination related to the Fukushima disaster?

I cannot comment on TEPCO’s financial situation. But what was tempting, and what is important for us, is that TEPCO is the largest player in the Japanese electricity industry, has deep insight into local power markets and the regulatory requirements, and now we have an MOU. That’s the first step on dealing with our aspirations to deliver large-scale wind power plants.

In general, what volume could be built as bottom-fixed off Japan, before developers need to go for floating?

I think it is fair to say that there is a potential for several gigawatts of bottom-fixed offshore wind until 2030. If we follow the Japanese Wind Power Association, then there are around about 10GW possible for sure. It depends a bit on how the market picks up. From a pure site point of view, there are plenty of opportunities in Japan. So maybe 7 to 8GW [of bottom-fixed] is a fair guess by 2030.

So you don’t need to go for floating that quickly?

Floating is a technology, which is continuing to mature. Also that time it is not needed immediately to switch to floating indeed.

In past years, many of the pilots off Japan have been floating. Did the industry go ahead of itself with those tests, while there is still a lot of bottom-fixed potential in Japan?

Japan is one of the, or maybe THE most promising market when it comes to the application of floating offshore wind in the future. I can see that it is the right thing to have different demonstration projects. But indeed the potential for bottom-fixed is there. And it is recommended in a new market to start with more established technology before we are heading over to newer technology.

Japan targets a renewables share of up to 24% by 2030. Do you think that is enough, or even ambitious? Germany or Denmark already now have much larger shares…

It took some time until they were able to get the law for offshore wind in place. I think it is a good target. Maybe it is up to the industry to deliver some success stories, and build the first wind farms. And then, there will probably be also an opportunity to increase that target. It is a good start. It is very good to see that there are double digit wind targets, and that offshore wind has been pointed out as clear target.

Does your experience so far in Taiwan help plans for offshore developments in Japan?

We have a hub in Taipei, which we will be able to use. We have experts, and an office with more than 30 people there. We have also gained a lot of experience during more than two years. We will leverage that. We will also leverage all the experts, and different knowledge centres we have in Denmark. But it certainly helps that we have developed this experience in Taiwan. We can see similarities, we have learned to operate in the region. There are a lot of similarities between Japan and Taiwan.

What similarities are those?

On the language side, characters. Many Taiwanese are able to read or even speak Japanese. Also, the Japanese industry, or any kind of players, are very present in Taiwan. There is a good collaboration between industry and business. So, we can clearly see a kind of synergies when looking at Japan.

How are you advancing in Taiwan?

We are working hard there to get more clarity and certainty for the Changhua 1 and 2A projects. It is now up to the bureau of energy to make us aware of what the feed-in tariff rate for 2019 would be. And it is very important that we get clarity on that very soon in order to meet our ambitious time line. For the moment, we have paused some of our activities with the supply chain. We expect more clarity over the next days or weeks.

Wind

‘Choshi will have several hundred megawatts or a bit more’