Japan's top power generator JERA has begun construction of its offshore wind project in Akita, northern Japan, and is on schedule for a 2028 start-up, President Hisahide Okuda said on Wednesday.
The move comes despite soaring material and construction costs, and last year's withdrawal by a Mitsubishi Corp-led group from three offshore wind projects awarded in 2021.
JERA won a government auction in 2023 to develop the 315-megawatt Oga-Katagami-Akita offshore wind farm with Electric Power Development, Itochu and Tohoku Electric Power. In 2024, a consortium of JERA, Green Power Investment and Tohoku Electric also secured a 615-MW project off Aomori prefecture in northern Japan.
"Costs have truly risen, creating a challenging environment, but rather than giving up, we aim to demonstrate that offshore wind power is feasible in Japan and that it can be a viable business – by successfully completing projects in both Akita and Aomori," Okuda told a news conference.
The first JERA-led consortium has signed a contract to procure turbines from Vestas for the Akita project, with Kajima handling turbine foundation work, Okuda said.
Earlier this month, JERA, Japan's largest buyer of liquefied natural gas, signed a deal with QatarEnergy, one of the world's biggest LNG suppliers, to buy 3 million metric tons of the super-chilled fuel annually for 27 years from 2028.
The agreement follows supply deals signed last year for U.S. LNG from four projects to diversify its global portfolio.
U.S. LNG is tradable and offers destination flexibility, making it a highly manageable balancing resource for renewable energy, Okuda said.
Qatar, while less flexible than other projects, has overwhelmingly strong emergency response capabilities, he said.
"Incorporating these two into our procurement portfolio significantly enhances our ability to meet rising electricity demand, manage renewable fluctuations and ensure economic security," Okuda said.
(Reuters - Reporting by Yuka Obayashi. Editing by Mark Potter)