Energy transition in Japan: wind and hydrogen on course for growth “From Hamburg to the World” – EEHH trip to Japan

Japan is one of the leading industrial nations with innovative renewable technologies and at the same time is one of the world’s biggest energy consumers. Over recent years, the expansion of renewable energies in Japan has made considerable progress. In 2022, around 22% of electricity generation came from renewable sources. The country wants to become climate-neutral by 2050. For this to happen, the proportion of renewable energies in the national electricity mix will have to rise to 40% by 2040.

The World Smart Energy Week is the leading international industry trade fair in the APAC region for various renewable technologies such as wind, solar, hydrogen/fuel cells, thermal and biomass. EEHH employee Jingkai Shi, International Cooperation Renewables, attended the trade fair for the first time and met EEHH members hep, RWE and Siemens Gamesa Renewable Energy, as well as other important stakeholders such as the German embassy and AHK Japan. The trip ended with a visit to Hamburg’s partner region, Fukushima.

Breakthrough for German wind enterprises

The Japanese government has set ambitious targets for expanding offshore wind energy with an installation of 10GW capacity by 2030 and 30GW in 2040. In this context, the market offers big opportunities for German enterprises because German technology and expertise is highly sought after in the Japanese wind industry. RWE Renewables, in a consortium with Mitsui and Osaka Gas, was granted rights in Auction Round 2 for the development, construction and operation of an offshore wind project off the country’s west coast in late 2023. The area has been allocated for the construction of a wind park with a planned installation capacity of 684MW; commissioning is scheduled for 2029.

At the start of 2024, Japan’s biggest wind park, Ishikari, began operations. In 2022, Siemens Gamesa was commissioned by Green Power Investment to deliver 14 wind turbines each with a capacity of 8MW plus a 15-year service and maintenance contract. For the German manufacturer, the project also marks its successful entry into the Japanese offshore sector. Onshore, Siemens Gamesa has already installed 1GW of capacity and is currently one of the top three wind turbine producers in Japan.

Both companies face some challenges. The offshore wind industry in Japan is in an early developmental phase. From the project developers’ perspective, certain underlying regulatory conditions must be enhanced and barriers removed. An improved, central coordination of conflicts of interest between different users of the maritime region, particularly the fishing industry, is necessary, along with more rapid authorisation. In parallel to the trade fair week, the Japanese government announced an amendment to the law to open up of the Exclusive Economic Zone (EEZ) for future tenders. Previously, construction of offshore wind projects was restricted to territorial and inland waters. The maritime areas with the highest wind speeds along Japan’s coastline are predominantly in deeper waters. A few kilometres from the shore, the shallow coastal waters drop from 500 metres to as deep as 1,000 metres. The expansion of the area in the EEZ offers an opportunity to use floating offshore wind system technologies.

German and Japanese companies agree that the combination of international project experience and local expertise can contribute to sustainable growth in the Japanese offshore wind industry. Today, up to 60% of the value creation (components/materials, vessels, skilled workers etc.) is already taking place in Japan. The global expansion of offshore wind energy requires a secure supply chain, and today this is 90% concentrated on Europe and the APAC region. Instead of isolated domestic markets, German wind enterprises are looking towards a networked and regional economic area that primarily comprises Japan, South Korea and Taiwan.

Hydrogen boost “colourless” for now

In 2017, Japan was the first country to publish a national hydrogen strategy. It sees its biggest advantage in ensuring stable and affordable energy supply and in achieving the energy transition in hydrogen. To make it possible for a rapid and broad hydrogen uptake to succeed, Japan does not see the colour of hydrogen as a decisive criterion. Japan is incorporating transitional technologies, for example hydrogen or ammonia, which are playing the primary role in the decarbonisation of the electricity sector.

Ammonia co-firing within existing coal power stations is one of the strategic applications in the hydrogen strategy. Japan’s biggest energy producer, JERA, began by demonstrating ammonia co-firing two years ago and is planning to increase admixture of ammonia to 50% from 2028, without any significant technical adaptation being required. In the long term, many coal power stations in the country are to be retrofitted to 100% use of ammonia or hydrogen.

Japan’s hydrogen strategy is intended to support enterprises in becoming market-leaders in future technologies, especially fuel cells and electrolysers. The use of fuel cells in mobility and private domestic use, as well as in electrolysers for decentral hydrogen production, were key topics at the H2 & Fuel Cell Expo during World Smart Energy Week. Leading manufacturing companies such as Toyota, Mitsubishi and Chiyoda presented the latest vehicle models and demonstration systems. In Europe, the significant potential of hydrogen in decarbonisation is seen in manufacturing, and as a result corresponding projects are being given targeted support with subsidy programmes such as IPCEI.

Japan is also unable to fully supply the hydrogen volume it needs from domestic production. The Japanese government and manufacturers are working with potential export markets such as Australia to expand the supply chain for hydrogen transport by sea and to deliver pilot projects for local hydrogen production. Shortly before the trade fair week, the Hy5 delegation and the EEHH Cluster Agency visited Enenos, one of Japan’s biggest oil corporations. The company is operating the first production plants in the Indo-Pacific region and is planning commercial upscaling of capacity to meet the hydrogen demand in Japan and in future to deliver to Europe/Germany.

Fukushima: Japan’s model renewable region

The devastating nuclear catastrophe 13 years ago triggered a comprehensive rethinking and redesign of the future of energy in Fukushima. In 2016, local government presented the Fukushima Plan for a New Energy Society and proclaimed that its highest priority was the expansion of renewable energies with an emphasis on a hydrogen-based society.

International cooperation is highly important for the reconstruction of the region. This has been reflected in the work of EnergyAgency.Fukushima (EAF) from the beginning. Since 2018 there has been a close and collegial relationship between the EEHH Cluster Agency and EAF. The City of Hamburg and the Prefecture of Fukushima maintain a bilateral agreement.

Fukushima wants to supply itself with 100% renewable energy by 2040. Currently, around 600 onshore wind power plants are under construction, many of them by Vestas and Siemens Gamesa. The Japanese gas company Tokyo Gas and Sinobuyama Fukushima Power are evaluating the feasibility of installing a floating offshore wind demonstration project with two 15MW turbines off the coast of Fukushima. Ambitious expansion targets and demographic change are facing Japan with a highly challenging shortage of skilled labour. According to an estimate by Fukushima O&M Academy (FOM), around 8,000 wind turbines will be installed and connected to the grid in Japan by 2030. This means 5,000 to 6,000 skilled workers are needed. FOM offers a programme certified by the Global Wind Energy Organisation for training workers for national and international turbine manufacturers and project developers.

The great efforts made in renewable energies are already paying off. In 2020, Fukushima was already top of the league in the production of solar energy and had secured itself eighth place in wind power. Fukushima is taking a pioneering role not just in expansion but also as an important location for research. The Fukushima Renewable Energy Institute (FREA), the regional subsidiary of the National Institute of Advanced Industrial Science and Technology (AIST) – comparable with the Fraunhofer Institute – is researching current technologies and solutions in the areas of wind, solar, thermal and hydrogen. The wind and hydrogen teams are in close dialogue with diverse scientific institutions of the EEHH network, including TUHH, HAW and Fraunhofer IWES. FREA has been working on metal hydride for many years. Around 3kg of metal hydride can store 1kg of hydrogen produced by electrolysis and re-release it for converting back to electricity. This approach may be unusual in Germany, but for Fukushima it is an eminently practical method to manage energy for emergencies such as earthquakes.

REH members or Hamburg companies who are seeking contact with business partners in Fukushima or are generally interested in exploring the Japanese renewables market are advised to attend the Fukushima Renewable Energy Industrial Fair. The prefecture supports participation by German enterprises by providing a grant for travel expenses. More information is available on demand from the REH Cluster Agency.