Japan Wind Energy Market - Growth, Trends, And Forecasts (2023 - 2028)

Japan Wind Energy Market - Growth, Trends, And Forecasts (2023 - 2028)

The Japan wind energy market is expected to witness a CAGR of more than 13% during the forecast period. COVID-19 negatively impacted the market in 2020. Presently the market is likely to reach pre-pandemic levels.

• Over the long term, factors like government policies, the increasing investment in upcoming wind power projects, and the reduced cost of wind energy, are expected to drive the market. which has led to increased adoption of wind energy
• On the other hand, The growing adoption of alternative energy sources such as gas-based power and solar power will likely hinder the market growth.
• Nevertheless, Increased demand for electricity in the country is expected to provide market opportunities for wind power development shortly. The massive wind power potential and a decline in the cost of wind energy are expected to provide widespread business opportunities to the market in the coming years.
• Favorable government policies and increasing investments in the offshore wind energy sector are expected to drive the market during the forecast period.

• Onshore wind energy is expected to dominate the market during the forecast period. Wind energy has become a major source of support for Japan to reach its net-zero target and decarbonize its heavy industry, such as steel manufacturing and shipping.
• With a new annual installation of 537 MW in 2022, onshore wind energy installed capacity in the country reached 5175 MW in 2022, up from 4638 MW in 2021, driving the onshore wind energy market in the country.
• As of 2022, the country’s total installed wind capacity reached 5.31 GW, according to OCCTO (Organization for Cross-regional Coordination of Transmission Operators), and all new capacity came from onshore wind installations. It is further expected to grow during the forecast period, as several wind power projects are planned in Japan.
• In November 2022, the Ministry of Economy, Trade, and Industry announced plans to begin public auctions for offshore wind generating projects in December 2022 under updated criteria to promote a broader range of operators and speed infrastructure construction. The auction is planned to cover four sites with a combined capacity of 1.8 GWs.
• In September 2021, Japanese electric utility Electric Power Development Co. Ltd, known as J-Power, announced it had started construction of a 34-MW wind farm in Ehime prefecture. Commercial operation is scheduled to commence in 2024.
• Expected to be commissioned in Q2 2023, the Dohoku wind farm cluster, an 339.7 MW wind farm cluster, consists of four projects located on the island of Hokkaido. The complex consists of 79 units of wind turbines.
• Hence, with existing onshore wind energy capacity and the upcoming projects, the segment is expected to dominate during the forecast period.

• Favorable government policies will drive the wind energy market in Japan. The government has launched various government policies and initiatives to support the growth of renewable energy and wind energy deployment in the country. For instance, in 2020, The Japanese government unveiled its Offshore Wind Industry Vision. This vision outlines a plan to allocate 1 GW of offshore wind capacity annually through 2030.
• Additionally, the government has plans for supply chain development and cost reduction pathways to reach JPY 8-9/kWh of LCOE by 2035 and 30-45 GW of cumulative capacity by 2040.
• As of 2022, the country’s total installed wind capacity reached 5.31 GW, according to OCCTO (Organization for Cross-regional Coordination of Transmission Operators), and all new capacity came from onshore wind installations. In 2021, Japan did not put any new offshore turbines into operation. According to Asia Wind Energy Association, Japan has an estimated wind energy potential of 144 GW for onshore wind and 608 GW of offshore wind capacity as of 2022.
• Japan's wind energy sector is expected to grow in the near future, owing to government initiatives to transition to cleaner energy sources and continual advancements in renewable technologies. In recent years, the country has established various climate goals in order to reach carbon neutrality.
• Throughout the forecast period, Japan is likely to invest considerably in wind energy. The wind energy sector in Japan is predicted to grow substantially during the forecast period owing to the strong legislative support for the country's renewable energy ambitions.
• In a bid to support the net-zero target, the Green Innovation Fund of JPY 2 trillion (USD 18.8 billion) was provided for the next 10 years in 2020. Further, the government is expected to provide tax incentives to stimulate JPY 1.7 trillion (USD 15.9 billion) in private investment. Such initiatives are expected to have a positive impact on the market studied.
• In December 2021, Japan launched an auction to select the developer of up to 356 MW of offshore wind capacity in the Happo-Noshiro zone off Akita prefecture, which will further help the market to grow in the forecast period.
• Hence, government support and rising investments in renewable energy are expected to drive the wind energy market growth during the forecast period.

The Japan wind energy market is consolidated. Some of the key players in the market (in no particular order) include Vestas, Siemens Gamesa Renewable Energy, Sumitomo Corporation, Marubeni Corporation, and Japan Renewable Energy Co. Ltd.

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