By Katya Golubkova and Yuka Obayashi
TOKYO (Reuters) – German renewable energy company RWE plans further expansions into Japan’s offshore wind sector after winning its first project last month, a senior executive told Reuters, and also considers South Korea a promising market.
RWE, the world’s second-biggest offshore wind company, won the right to build a 684-megawatt (MW) wind farm in Niigata prefecture in northern Japan in a consortium with Mitsui & Co and Osaka Gas as part of the second round of Japanese state auctions.
RWE plans to launch the farm in June 2029 and will share capital expenditures with partners based on their share, Sven Utermohlen, CEO of RWE Offshore Wind, said on Wednesday. He declined to disclose the share and investments.
“Our average (capital expenditure) assumption for our wind farms is approximately 3 million euros ($3.27 million) per megawatt,” Utermohlen said, noting the average cost has risen because of relatively high inflation in the industry and would depend on factors including water depth, distance to shore, size and supply chain.
For RWE, Japan is a strategic core market in Asia, he said. The company also wants to expand in South Korea but has decided not to continue with additional offshore wind development in India and Taiwan.
“We’re actively developing further projects and also actively preparing for the upcoming auction rounds in Japan to participate again… We can’t do the whole world and we felt that for us, Japan and South Korea are more attractive than India and Taiwan.”
RWE, which operates 3.3 gigawatt (GW) of offshore wind power in Europe, wants to expand in Japan by taking part in future state offshore wind auctions and by developing floating offshore wind once legislation is in place, he said.
“We believe that Japan, obviously, with the long-term goal of 45 gigawatts by 2040, will have to go floating. Otherwise, that is just not achievable,” Utermohlen said.
RWE has previously teamed-up with Kansai Electric Power Co on a joint feasibility study for a floating offshore wind project.
The first round of Japan offshore wind auctions, in which RWE participated, was won in 2021 by consortiums led by Mitsubishi Corp. Japan plans to launch a third round to build 1 GW of offshore wind farms later this year.
Foreign companies have been advocating for bigger and more aggressive auctions as more attractive and cost-effective, a view Utermohlen shares.
“Scale would allow the supply chain to make investments in Japan, build up manufacturing capacities and also maintain them, keep them busy, which then over time also gets the costs down,” he said.
($1 = 0.9186 euros)
(Reporting by Katya Golubkova and Yuka Obayashi; Editing by Tony Munroe and Christian Schmollinger)
