No sooner had Japan announced the results of Round 3 offshore wind auctions, than attention shifted from the big wins for JERA and Marubeni to the fact that many of the major industry players abstained from bidding. 

Media reports of potential losses for winners of Round 1 followed. Pundits questioned Japan’s ability to meet its wind capacity goals for 2030, while developers bemoaned the weak yen and supply chain headaches.

So, is Japan losing its allure as a lucrative destination for offshore wind power?

Au contraire.

The challenges in Japan’s offshore wind sector were always on the cards as the teething pains of setting up a new national infrastructure segment. Inflation, community and even currency issues echo those elsewhere. At least Japan’s leaders support wind power rather than calling it “garbage,” as per the opinion of the incoming U.S. president.

The potential size of the Japanese market; the legislative push to expand the available sea areas; the political backing; and (slowly) stabilizing domestic supply chains indicate to many industry players that projects in Japan are worth it. Some equipment suppliers say they see strong order growth in the second half of this decade. But in the short term, expect choppy waters.

Japan NRG looks at the state of play in the sector in the aftermath of Round 3 results.