BP Targets Japanese Offshore Wind as Japan Conducts Third Auction
As Japan seeks to accelerate the development of its offshore wind power generation capabilities, the market is continuing to attract majors to the opportunities. In the latest development, BP announced it is partnering with Marubeni, the Japanese integrated trading and investment conglomerate, to explore an offshore wind development opportunity in Japan. The two have agreed to form a strategic partnership for offshore wind and potentially other decarbonization projects, including hydrogen.
“Combining our international energy expertise and technical capabilities with Marubeni’s track record of wind and energy development and first-class regional relationships, we can together build important new clean energy resources for Japan and Asia,” said Anja-Isabel Dotzenrath, bp’s executive vice president of gas & low carbon energy explaining the new joint venture. “We want to continue to build on BP’s offshore wind portfolio – and we can’t wait to get to work in Japan with Marubeni.”
Last week, Koichi Hagiuda of Japan’s Ministry of Economy, Trade and Industry said the country needed to accelerate its development of renewable offshore energy. Citing the current situation in Ukraine and disruptions to the global energy markets, he said it demonstrated the importance of building Japan’s resources and increasing the country’s energy independence.
The Japanese government mapped out a strategy to deploy 10 GW of offshore wind capacity by 2030 helping renewable energy to become a third of the country’s energy supply by the end of this decade. They plan to continue to develop wind projects to reach 30 to 45 GW by 2040, including floating wind turbines, and the country has declared toward a goal of carbon neutrality by 2050. To reach that goal, offshore wind power will be a key part of Japan’s long-term energy strategy.
BP and Marubeni mapped out several strategies, including BP’s plans to establish a local offshore wind development team in Tokyo. BP will also purchase a 49 percent stake in a proposed offshore wind project that Marubeni had previously presented to the government. The companies also plan to seek additional offshore opportunities in wind power generation.
The announcement comes as Japan is currently accepting proposals in its third major round of bidding for offshore wind. The current round began in December 2021 to select the developer of up to 356 MW of offshore wind capacity to be located in the Sea of Japan off the northern coast. Proposals are due by June 2022 with the award expected in December.
Last December, Japan awarded three offshore projects with the potential for nearly 1.7 GW of wind power generation to projects led by Mitsubishi. The competition for the projects has been fierce with Mitsubishi winning those leases by offering low tariff prices far below the maximum under the Japanese terms.
BP will face strong competition as it seeks to enter the market with reports that other industry leaders, including Denmark's Orsted and Germany's RWE, are also making proposals to enter the Japanese market. BP highlighted that it already has a net offshore wind development pipeline of more than 5 GW, with projects in the U.S. and UK. Since 2019, they reported increasing their renewables development pipeline four-fold to more than 24GW while Marubeni has a total power generating capacity of about 12 GW and has been involved in the development and operation of more than 2 GW of onshore and offshore wind power globally. Marubeni is also the lead partner in the development, permitting, and construction of the first large-scale, commercial offshore wind project to achieve financial close in Japan.