TEPCO & Ørsted Sign MoU To Explore Japanese Offshore Wind Projects

Danish power giant Ørsted has signed a Memorandum of Understanding with Tokyo Electric Power Company Holdings, better known as TEPCO, to explore the possibility and to work jointly on developing offshore wind projects in Japan.

Following in the footsteps of a similar Memorandum of Understanding (MoU) signed by Japan’s Electric Power Development Co., better known as J-Power, and French multinational electric utility ENGIE back in September 2018, and building on TEPCO’s plans to build up to 6 or 7 gigawatts (GW) of renewable energy — outlined by TEPCO’s president Tomoaki Kobayakawa in July 2018 who outlined offshore as the company’s primary focus — the new MoU will focus first on the Choshi offshore wind project near Tokyo. TEPCO has been carrying out a seabed survey to examine the feasibility of developing the Choshi offshore wind farm, announced last November, located off the coast of the Chiba Prefecture.

“We’re confident that the partnership combining TEPCO’s extensive expertise in the Japanese power business and Ørsted’s unparalleled track record in the offshore wind business will lead to success in the Choshi project,” said TEPCO Representative Executive Officer and President, Tomoaki Kobayakawa. “We hope that this first step paves the way for expansion beyond the coastlines of Japan for the development, construction, operation and ownership of offshore wind projects.”

“TEPCO is aiming to make renewable energy a core generating source by developing 6-7 GW of renewable energy projects in Japan and overseas. The partnership with Ørsted will provide us with a very strong platform to scale up our renewable energy business as one of our main pillars of business growth.”

Beyond the Choshi project, TEPCO and Ørsted will also work towards building a strategic partnership for broader collaboration. It’s also worth noting the way in which TEPCO phrased its statement from Tomoaki Kobayakawa, which suggests that TEPCO will also look to work with Ørsted in developing offshore wind projects away from Japan, as well as in Japanese waters, in line with TEPCO’s July comments.

“Our vision is to create a world that runs entirely on green energy, and we look forward to expanding our presence in the Asia-Pacific region and bringing over two decades of offshore wind knowledge into this partnership for the Choshi project,” added Ørsted CEO and President, Henrik Poulsen.

“As the largest player in the Japanese electricity industry, TEPCO has deep insights into the local power market and the regulatory requirements. This MoU is the first step in Ørsted and TEPCO’s aspirations to deliver on Japan’s ambitions for domestic renewable power generation at a large scale and contribute to making Japan a leading offshore wind market in the Asia-Pacific. We welcome this first opportunity to work with TEPCO and look forward to strengthening our relationship further.”

Japan’s offshore wind sector has received significant support of late, due in large part (unfortunately) to the disastrous nuclear meltdown of the Fukushima Daiichi Nuclear Power Plant in 2011. The Japanese Government has committed to increasing the deployment of renewable energy projects and the passing of a legislating foundation for designating large-scale offshore wind development areas. Specifically, Japan is targeting 10 gigawatts (GW) of wind energy by 2030 as part of a larger plan to reach a 22-24% renewable share of electricity generation by 2030. According to Ørsted’s Head of Group Press Relations, Tom Lehn-Christiansen, “While this target is for onshore and offshore wind combined, I believe it’s fair to say that offshore wind is well positioned due to its scalability and the fact that Japan is mountainous, which means there’s limited space for onshore renewables.”

Expectations are also high for the country’s solar industry which is expected to add 17 GW worth of new solar capacity between the end of 2017 and the end of 2020, according to a report published in October 2018.

As for Japan’s offshore prospects, Wood Mackenzie analysts expect both Japan and neighboring South Korea to boast an offshore base of over 2 GW each by 2027. This might even be low-balling things, given comments made by TEPCO President Tomoaki Kobayakawa in July 2018, promising that his company was looking to develop between 6 GW and 7 GW of renewable energy across Japan and overseas, focusing primarily on offshore wind. This was followed only a few months later by the MoU signed between J-Power and ENGIE. Considering also the prospect of Taiwan’s own burgeoning offshore wind goals — having already awarded 5.5 GW worth of capacity to be developed by 2025 — offshore wind in East Asia is shaping up to be a hot commodity.