Total Installed Capacity
Year	2000	2001	2002	2003	2004	2005	2006	2007	2008
MW	136	302	338	580	809	1,049	1,309	1,538	1,880

Please note that this text was last updated in March 2009

Japan’s wind energy industry has surged forward in recent years, partly spurred by a government requirement for electricity companies to source an increasing percentage of their supply from renewables. Development has also been encouraged by the introduction of market incentives, both in terms of the price paid for the output from renewable plants and in the form of capital grants towards clean energy projects. Power purchase agreements for renewables also have a relatively long lifespan of 15 to 17 years, which helps to encourage investor confidence. The result has been an increase in Japan’s installed capacity from 136 MW at the end of 2000 to 1,880 MW at the end of 2008. In 2008, 346 MW of new wind capacity was added in Japan.

 

The policy framework

In pursuit of its Kyoto Protocol objectives, Japan has a target to reduce the level of its greenhouse gas emissions by 6% (compared with 1990 levels) in the period from 2008 to 2012. The official government target for wind power in Japan by 2010 is 3,000 MW, but judging from the current pace of installations, this target seems difficult to reach.

To help achieve these goals, the Japanese government introduced a Renewable Portfolio Standard (RPS) law in April 2003 with the aim of stimulating renewable energy to provide 12.2TWh (1.35%) of total electricity supply in 2010. RPS targets will be reviewed every four years, and a new target of 16.0 TWh (1.63%) by 2014 was established in 2007. The Japanese RPS law has a number of weaknesses, including a very low target, the inclusion of electricity generated by waste incineration as “renewable” and insufficient market incentives.

Apart from the RPS, the Japanese wind industry also benefits from the government’s initial subsidies such as the Field Test and New Energy Business Support Programmes.

 

The wind market

Wind power capacity in Japan increased quickly in the past ten years, but most recently the sector has experienced a slowdown.

There are four major reasons for this slowdown, namely extreme weather, the lack of a stable legal system, grid constraints and the stagnating economy.

Firstly, severe weather conditions are constraining growth of the Japanese wind market. The country has a history of severe weather, including typhoons blowing down turbines, lightning incidents, strong gusts and high turbulence. A number of turbines were severely damaged in 2004 and in 2007. Therefore, a safety standard designed for Japanese meteorological and geographical conditions is being developed to provide technical measures against typhoons and lightning strikes and to help future wind turbine development.

Improving the integration between the International Electro Technical Commission (IEC) standards and Japanese Industrial Standards (JIS) is an important task, because the aforementioned Japanese external conditions differ from those in IEC standards. The New Energy and Industrial Technology Development Organization (NEDO) and the Japan Electrical Manufacturers’ Association (JEMA) support this task under METI’s initiative to develop ‘J (Japanese)-class wind models’ with which any manufacturer can design a turbine any place in Japan. A guideline was created under the NEDO project for J-class wind turbines, which suggests some safety measures.

Secondly, the new Japanese building code became effective in June 2007, stipulating that a wind turbine 60m or taller will be considered a building. Under this revised code, the installation of wind turbines needs the government’s authorization, and the application procedure for planning permission is very complicated, time consuming and expensive. The new building code effectively paralyzed the Japanese market for a whole year, before the first project was authorized under the new code in July 2008. However, the permission process is more standardized now and many projects have been authorized.

Thirdly, grid infrastructure continues to be a challenge for wind development in Japan. The leading regions for wind power development in Japan are Tohoku and Hokkaido in the north of the country and Kyushu in the south. The greatest
electricity demand is concentrated in the center of Japan, while most potential wind power sites are located in remote areas where grid capacity is relatively small.

Limited grid access and the monopolistic hold over the power grids by regional electricity companies, who use variability issues as an excuse for not investing in more capacity, have also hampered the development of wind generation. Both the Japanese Wind Energy Association (JWEA) and the Japanese Wind Power Association (JWPA) therefore support further R&D activity in the areas of grid stability, technical safety, offshore wind and generic advanced technologies.

Finally, a shortage of available turbines in Japan has led to high prices, which is further accentuated by the depreciation of the Japanese yen against the Euro. in recent months, turbine prices have fallen due to the appreciation of the Japanese yen against the Euro in the second half of 2008. As a result, developers are attempting to resurrect projects that have been shelved previously. Nonetheless, new installations in 2009 are not expected to be high due to long lead times for the delivery of wind turbines.

 

The wind turbine market in Japan

Japan now has four wind turbine manufactures; Mitsubishi Heavy Industry (MHI, 2.4 MW), Fuji Heavy Industry (2 MW), Japan Steel Works (JSW) (2 MW), Komai Tekko (300 kW). However, foreign manufacturers such as Vestas, GE and
Enercon dominate the Japanese market.

Nagashima Wind Hill, the third largest wind farm in Japan, has 21 MHI 2.4 MW turbines and is one of the last wind farms to use these turbines. MHI stopped selling their turbines in Japan and now concentrates on foreign markets, even though it retains a domestic market share of 19%. Despite its significant offshore wind energy potential, Japan has so far only developed 11 MW. The government has recently investigated the feasibility of offshore projects, and offshore wind measurements will start in 2009 under the NEDO project.