Toshiba Corporation, Hitachi Zosen Corporation, JFE Steel Corporation, Sumitomo Electric Industries Ltd, Toa Corp, and Toyo Construction Co Ltd. are expected to invest 120 billion yen, or $1.53 billion, setting up offshore wind turbines in the near future. This is part of a massive 300-MW wind farm.
The cost mentioned above translates into $5.10 USD per watt of installed wind power generation capacity.
This is relatively small compared to the cost of a residential solar setup, which is ~$7 per watt, but it does not include electricity transmission costs or the profit of power companies, so, unfortunately, end users of electricity usually don’t get to enjoy the power plant quantity discounts caused by economies of scale.
Potential sites for the project include areas off the coast of the Kyushu region in southern Japan. Funds will be raised through special-purpose and project financing, according to Nikkei.
The Japanese government hopes to begin building more offshore wind farms and eventually catch up to the offshore wind development progress of European countries such as the United Kingdom.
The government believes that it can eventually build up to 1,600 GW of offshore wind power generation capacity. This can power an average of 160 million homes, assuming an average capacity factor of 30% (533 million if the turbines generated as much as their nameplate capacity).
It isn’t that Japan is going to build 1,600 GW any time soon — this is a very long-term projection. Japan’s population in 2011 was 127.8 million. The population and power demand of Japan would have to grow substantially for it to require 1,600 GW of wind power.
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