Why this is important to Wisconsin businesses: Opportunities for Wisconsin companies to sell products and technologies related to wind power

As the government moves to rectify the current overemphasis on solar power, wind power seems poised to become a new pillar for leveraging renewable energy toward achieving the goals set out in the Paris Agreement, an international framework to reduce greenhouse gas emissions.

The operating capacity of wind power is roughly double that of solar, enabling electricity to be obtained more efficiently. Wind can even be generated offshore, and thus does not have as many physical locational constraints as geothermal power, nor does it require securing wood fuels as is the case with biomass power. Nevertheless, according to the International Energy Agency (IEA), Japan’s proportion of wind power generation is just 0.5 percent as of 2014 – lower than the U.S., Europe, and China.

In 2012, the national government’s Environmental Impact Assessment made it mandatory to build large-scale wind power plants, taking four to five years to complete with procedures, causing the introduction of new plants to stall. The fixed-price purchasing system for renewable energy got under way in the same year; however, of the electric power facilities approved under the system, solar, with its ease of construction, accounts for roughly 93 percent, or 80 million kilowatts, while wind remains at 3 percent.

According to estimates from the Japan Wind Power Association, wind power capacity – which was 3.04 million kilowatts at the end of 2015 – will swell to 10 million kilowatts by 2020 due to factors such as progress with environmental impact assessments. As the government intends to lower the purchase price from “mega-solar” (large solar) power plants and promote the introduction of wind power by, for example, pegging the price of large-scale wind power, there has been an influx of new construction plans for wind power plants domestically. By around 2020, Japan’s domestic electric power production capacity is expected to increase threefold with respect to current levels.

The domestic wind power leader, Eurus Energy Holdings, Inc. and the second-ranking wind power enterprise, J-Power, each plan to invest over $500 million by 2020. Eurus is a joint venture company between Toyota Tsusho and the Tokyo Electric Power Company. Combining the total wind power generation capacity of Eurus Energy and J-Power accounts for roughly 33 percent of the national total, according to Nikkei Statistics for the 2014 fiscal year.

Hitachi Ltd. aims to double its production capacity of wind power turbines by around 2017, and is building a new factory in Ibaraki. The company plans to boost revenues from its wind power business nearly fivefold by fiscal 2020 to $890 million.

Overseas players are also beginning to make some moves. U.S. wind power giant Pattern Energy plans construction for a total of 1 million kilowatts in Japan by 2020 through a joint-venture company. Under the fixed price purchase (feed-in-tariff, or “FIT”) system for renewable energy, the purchase price of solar energy has dropped, while wind power has been remained stable. Eyeing market expansion, GE re-entered the domestic Japanese market in 2014. Siemens is also going on the offensive. Looking ahead, it looks as though investments in Japan from domestic and overseas manufacturers alike will continue to grow.