Marubeni Faces Ship Shortage, Grid Issues in Offshore Wind Push

(Bloomberg) — Marubeni Corp. is planning to develop more
than five times the offshore wind power capacity currently
installed in Japan as it moves aggressively into a poorly
developed area of the country’s renewable energy market.

“If you want to do large-scale projects, it’s offshore
wind that has the most potential” among clean energy sources,
Tomofumi Fukuda, who oversees power projects in Japan for the
Tokyo-based trading company, said in an interview.

Marubeni will need to overcome several challenges for its
plans of installing more than 270 megawatts of offshore wind, a
dearth of ships outfitted to install turbines off the coast
chief among them. Japan had offshore capacity of 52 megawatts at
the end of 2014, a fraction of the 2,715 megawatts of onshore
wind, according to Bloomberg New Energy Finance data.

“The fundamental problems are the lack of vessels and
experience” in offshore engineering, Fukuda said. “These are
Japan’s biggest weaknesses that need to be overcome.”

Japan’s 30,000 kilometers (18,600 miles) of coastline offer
a tantalizing opportunity for the resource-poor country to take
advantage of an abundance of wind energy sitting at its
doorstep. But to do that, Japan must first ratchet up its
engineering capabilities.

Fukushima Project

Marubeni is leading a government-funded demonstration
project using turbines that float in the waters off Fukushima,
the site of the 2011 nuclear disaster.

The company is also planning wind farms with bottom-fixed
turbines, a technology widely used in Europe. Marubeni and
partners plan to build two wind farms with a combined capacity
of 145 megawatts off Akita prefecture in northern Japan.

Marubeni also has plans for a 125-megawatt station off
Ibaraki, northeast of Tokyo and is considering one other
location for the technology, Fukuda said, declining to give
details.

European countries lead offshore wind development. The U.K.
and Germany had 4,228 megawatts and 1,516 megawatts in 2014
respectively, according to London-based BNEF.

Japan’s offshore wind capacity will expand to 486 megawatts
by 2020, BNEF estimated in a September report. Most of the
operating turbines are within striking distance of the nation’s
coastline, making it easier to build and maintain the
facilities. Japan has 915 megawatts of offshore wind planned,
according to the Japan Wind Power Association.

The technology got a boost last year when the Japanese
government began offering a tariff for the purchases of offshore
wind power at 64 percent higher than the onshore wind tariff.

Wind Tariff

But even the higher rate may not be enough to cover the
cost. The tariff was set at 36 yen (30 cents) per kilowatt hour
taking into account capital costs — surveys, design, equipment,
and construction fees — of 565,000 yen per kilowatt. Marubeni
estimates capital costs of 600,000 yen per kilowatt, Fukuda
said.

Negotiations with local fishing industry are also crucial,
according to the official.

Moreover, installation vessels will need to accommodate
larger-size turbines and other equipment because developers are
aiming for larger offshore wind farms than found elsewhere, he
said. Whether the more economical option is to charter or build
suitable vessels is also yet to be decided by Japan’s wind
industry, Fukuda added.

Marubeni is also working with partners including Tohoku
Electric Power Co.
to strengthen grid capacity for the two Akita
stations so that the region can accommodate as much as 600
megawatts of wind capacity, according to Fukuda. The project is
supported by the government.

To contact the reporter on this story:
Chisaki Watanabe in Tokyo at
cwatanabe5@bloomberg.net

To contact the editors responsible for this story:
Reed Landberg at
landberg@bloomberg.net
Iain Wilson, Indranil Ghosh

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