Renewable Energy Institute today released "Regional Economic Analysis of Bottom-fixed Offshore Wind Power" (original Japanese version published in June 2024).
The world's installed capacity of offshore wind power reached over 75 GW by the end of 2023, and is expected to increase to around 300 GW globally by 2030. In this context, from the perspective of transitioning to a decarbonized society and energy security, it is imperative for Japan to expand bottom-fixed offshore wind power generation, which has a potential of 176 GW within its territorial waters alone. Japan aims to attain the deployment target of up to 45 GW by 2040, and approximately 5 GW of power plants are expected to be in operation by 2030.
However, there is a lack of understanding among local communities in many areas, including fisheries, who are the primary users of the sea, and there has been little progress in designating new sea areas for the installation of offshore wind farms. At the same time, a key concern of local stakeholders and authorities is the extent to which the offshore wind power development will bring new benefits to the region. In order to accelerate the development and deployment of offshore wind power and designation of sea areas, it is essential to demonstrate how offshore wind power would benefit the local region. Without the understanding of the local communities, it will be difficult to expect rapid progress in identifying offshore areas.
Against this background, this report has used the regional value-added analysis model and project cost data to render visible the regional value-added effects generated by the adoption of an offshore wind power project. It has also clarified anticipated regional value added in each element of the project. These analyses will be used to consider which parts of offshore wind projects can generate regional value and to what extent, depending on the industrial structure and economic conditions of each region. Based on the result of the analysis, the report also makes recommendations for initiatives needed to speed up the designation of offshore areas.
While many regions in Japan are losing their vitality due to depopulation and industrial decline, offshore wind power as a new industry has the potential to play a key role in the future of the region. We hope that this report will be one of the factors that will help the local communities decide on how to coexist with offshore wind power on a regional basis.
<Table of Contents>
I. Current Status and Challenges in Offshore Wind Power in Japan
1. Current status of wind power in Japan and abroad
2. Challenges for offshore wind power in Japan
3. Aims of this report
II. The Regional Value-added Analysis Model in Offshore Wind Power Projects
1. Subject of analysis
2. Assumptions and data used
3. Results of estimate using the basic model
III. Case-Specific Regional Value-added Analysis
1. Regional value-added analysis by project element
2. Regional value-added analysis in different regional cases
V. Conclusions
Appendix 1: Regional Value-added Analysis
1. Input-output analysis and regional value-added analysis
2. The five project stages used in regional value-added analysis
3. Regional procurement rate
4. Anticipated regional value added
5. Components of regional value added
Appendix 2: Adjusting basic model costs for each project Stage
List of Tables and Figures
