Procurement Price Set for Offshore Wind Power to Expand Its Introduction

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The Ministry of Economy, Trade and Industry compiled the results of the discussions carried out by a study group on the procurement price for offshore wind power based on the Feed-in Tariff (FIT) scheme, and publicized the details on January 7, 2014. Having higher wind speed and less impact on landscape and noise, offshore power generation enjoys several advantages when compared to land-based wind power generation, and it is expected to be a major driving force for promoting renewable energy in Japan. Under the current FIT system, the procurement price for wind power is set with an eye on land-based wind power generation; thus, a price for offshore wind power needs to be set for its further expansion.

The study group, consisting of outside experts, streamlined cost data regarding the initial installation and operation of 2-MW class offshore wind turbines off the coast of Choshi City, Chiba Prefecture, and off the coast of Kitakyushu City, Fukuoka Prefecture. They mainly discussed the cost data of two hypothetical cases (installation off the coast and the installation at a site with relatively good conditions), and concluded as follows: the facility-operating ratio for offshore wind power generation should be set at more than 30 percent; although the initial installation cost in Japan is two to three times higher than that in Europe, the costs will decrease as Japan become more proficient with the offshore wind power development.

The results of the discussions will be utilized in the determination of procurement price under the FIT system.