Japan’s Ministry of Economy, Trade and Industry (METI) will sign a cooperation agreement with Siemens Energy to create a local supply chain for the offshore wind sector, an official at the ministry told Reuters on Tuesday.
The deal will look to establish a domestic supply chain in cooperation with global wind power technology giants.
As part of the cooperation agreement, Siemens Energy’s wind turbine division, Siemens Gamesa, is expected to sign a deal with Japanese electronics equipment manufacturer TDK. The Japanese firm is set to deliver permanent magnets for Siemens Gamesa’s wind turbines, the ministry official told Reuters.
Last month, reports emerged that offshore wind industry representatives are seeking better auction and fiscal terms from the Japanese government to help companies develop the wind industry’s potential offshore Japan.
Japan has a plan to have offshore wind projects with a total capacity of 10 GW developed by 2030 and 30 GW-45 GW by 2040. The country has held three auctions to award capacity so far, but major developers have been reviewing their options in Japan amid headwinds in the sector globally, with surging costs and supply-chain delays.
The Japanese government is considering extending the duration of the projects to 40 years from 30 years now, and allowing non-Japanese vessels to operate in offshore wind areas, according to multiple industry sources who spoke to Reuters in May.
The industry also seeks capacity auctions for multi-year power contracts, and fiscal relief in the form of either subsidies or tax relief for the large industrial users to encourage them to sign long-term power purchase agreements (PPAs) with wind project developers.
The offshore wind industry has already backed off from previously ambitious plans in Japan.
Earlier this year, Mitsubishi Corporation said it is reviewing its business plans for Japanese offshore wind power generation projects “due to material changes in the macroeconomic environment.”
Orsted, the world’s biggest offshore wind project developer, said last year it was “deprioritising development activities in Japan.”
By Tsvetana Paraskova for Oilprice.com
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