Chinese offshore turbine maker Mingyang Smart Energy (MYSE) [601615:CH] has reached an agreement to provide three three-megawatt turbines for a wind power facility off the coast of Nyuzen, a town in central Japan, as reported by Nikkei Asia on February 4. The transaction makes MYSE the first Chinese company to supply turbines to Japan’s offshore wind power projects. According to people involved in the project, the Chinese company won the contract as it offered cheaper prices than western rivals and convenient maintenance services due to the close geographic distance between China and Japan.
Japan’s ambitious plan to develop offshore wind power has attracted large foreign wind power companies such as Germany’s RWE [RWEG:GR] and Denmark’s Orsted [ORSTED:DC]. The country aims for 10 gigawatts (GW) of offshore wind capacity by 2030 and up to 45 GW by 2040, compared to the 2020 level of 20,000 kilowatts (0.02 GW). In comparison, the EU and China respectively aim to produce 127 GW and 107 GW of offshore wind power in 2040. Japan expects the cost for offshore wind power generation to become lower than that of thermal power sometime between 2030 and 2035, making wind power a crucial part of accelerating the renewable energy transition. Last October, Japan planned to raise the share of renewable energy in the electricity supply to between 36% and 38% in 2030 from 19% in 2019, revising from a previous target of 22% to 24%.