Although Japanese companies have offshore wind assets in countries from Taiwan to Belgium and Britain, they have yet to build large-scale farms at home.

On Tuesday, Japan's government approved a draft amendment to the existing legislation to allow for the installation of offshore wind power in exclusive economic zones (EEZ), a milestone towards the country's goal of carbon neutrality by 2050.

HOW DOES JAPAN PLAN TO BOOST CAPACITY?

Japan's 136 megawatt (MW) of offshore wind capacity installed by 2022 was a fraction of Britain's nearly 14 GW and China's 31 GW, the Global Wind Energy Council says.

It aims to have 10 GW by 2030, with up to 45 GW operational by 2040, as it targets a share of 36% to 38% for renewables in its electricity mix by the end of this decade, compared to about 20% now, in its race to be carbon neutral by 2050.

A Marubeni-led consortium launched Japan's first large-scale commercial offshore wind operations at Noshiro port (84 MW) and Akita port (55 MW) in late 2022 and early 2023.

Danish wind turbine maker Vestas provided bottom-fixed turbines for Marubeni's farms.

WHAT WAS THE RESULT OF THE FIRST ROUND?

A Mitsubishi-led consortium won all three offshore wind farm auctions in 2021 in the regions of Akita and Chiba, with combined capacity of 1.7 GW and a target start-up date of 2028 to 2030.

All will have bottom-fixed structures. General Electric will make 134 wind turbines, each of capacity 13 MW, to be assembled and maintained by Japan's Toshiba.

The first major round spurred interest by foreign companies in entering the Japanese market, among them Denmark's Orsted, Germany's RWE and Norway's Equinor.

WHAT HAPPENED IN THE SECOND ROUND FOR 1.8 GW CAPACITY?

RWE was the only foreign player awarded a 684 MW wind farm, in a consortium with Japanese partners, for the three projects in the second round of auctions, and the rest was taken by local companies.

The three projects are all bottom-fixed type wind farms and scheduled to start operation between June 2028 and August 2029, with turbines from Vestas and General Electric are to be used.

The winner of the remaining 356 MW farm off the coast of Happo-Noshiro in Akita prefecture should be announced in March 2024.

In January, the government launched a third round of auctions to select operators for two new offshore wind power areas capable of generating 1.05 GW in the northern part of the country, with results due in December.

WHAT ARE THE PLANS FOR FLOATING OFFSHORE PLANTS?

In 2021, the government selected a consortium of six companies led by Toda Corp to build the 16.8 MW Goto floating offshore wind farm in Nagasaki prefecture. It was the only auction bidder for the small project.

In September, Toda and its partners flagged a two-year delay in startup of the Goto project, to January 2026, because of defects in a floating structure.

The amended legislation, which the government aims to pass during this parliamentary session ending in June, would allow the installation of offshore wind warms further into the sea, or the EEZ, from current territorial and internal waters.

EEZs are non-territorial waters where maritime nations claim mineral exploration and fishing rights.

Through the bill, Japan plans to create large-scale projects in the sea area, accelerating offshore wind expansion.

An installation area in the EEZ could support a generation capacity of several gigawatts, much larger than the projects in territorial waters, according to the industry ministry.

WHAT CONSTRAINTS AWAIT?

METI recommends a domestic share of 60% of the supply chain by 2040. All major global renewable energy companies, from Orsted and RWE to BP, Equinor and Iberdrola, have set up offices in Japan.

GE Renewable Energy has teamed with Toshiba Energy Systems & Solutions to make GE's Haliade-X offshore wind turbines near Tokyo from 2026, turning out about 80 units a year, or 1 GW annually.

The partnership is the sole nacelle supplier for the first round.

(Reporting by Katya Golubkova and Yuka Obayashi; Editing by Louise Heavens)