Tokyo Report | Environment | East Asia

Japan Is Investing in Offshore Wind in the UK. What About at Home?

The Japan-U.K. compact shows Japanese companies still have an appetite for offshore wind, but local communities must not be left behind.

The announcement of a Japan-U.K. Offshore Wind Compact during Prime Minister Takaichi Sanae’s visit to the United Kingdom in mid-June rounds off a turbulent 12 months for the offshore wind energy sector in Japan. Successes such as the Kitakyushu Hibikinada and Goto schemes in Kyushu coming online have been offset by the withdrawal of Mitsubishi from high-profile projects off the Akita and Chiba coasts due to spiraling costs. Much of the blame for these failures has been attributed to the previous rules set by the Japanese government for companies bidding to develop projects, which left developers exposed to inflation and unexpected price hikes. 

Without a strong business case, the future for offshore wind energy within Japan looks uncertain. This represents a blow to Japan’s international climate change obligations, within which offshore wind energy is expected to play a small but significant role. Perhaps more significantly, however, Japan’s stuttering offshore wind progress is a cause for concern for shrinking coastal cities such as Muroran in Hokkaido and Choshi in Chiba, which are betting on wind farms in their coastal waters to bring jobs and revenue.

Meanwhile, 10,000 kilometers away, the deal agreed by the British and Japanese prime ministers could enable up to 9 billion pounds in Japanese investment into the United Kingdom’s offshore wind sector. Even before the Japan-U.K. compact was announced, Mitsui & Co had signed a deal to acquire the Port of Nigg, a major Scottish base for North Sea offshore renewables. In just a few months’ time, a manufacturing facility backed by Sumitomo Electric Industries to the tune of 350 million pounds is scheduled to open its doors in the same region. Marubeni too has made multiple investments in Scotland’s offshore wind sector in recent years.

One might conclude Japanese companies are more enthusiastic about enabling the infrastructure for offshore wind in Scotland, and the wider United Kingdom, than in their own country. This is hardly surprising. Both Scottish and U.K. governments have courted Japanese developers for over a decade. Scotland even established an office in Nagasaki to tap into the region’s marine industry cluster. Customs and tax incentives offered by the Inverness and Cromarty Firth Green Freeport, within which the Port of Nigg is located, are an especially big draw for Japanese companies working in the offshore renewable energy supply chain.

As Japan’s government works to reboot its offshore wind policies and keep its climate obligations on track, it could learn from locations like Scotland and the wider U.K. that have persuaded Japanese developers to........

© The Diplomat