March 7, 2017

Japan Wind Power Association (JWPA)http://jwpa.jp/en

Wind Power in Japan-Present Status and Challenges-

REvision2017 Experts MeetingRenewable Energy Institute

Japan Wind Power Association (JWPA)

■ Brief HistoryDecember 17, 2001： started as a Voluntary Association

April 1, 2010 ： incorporated as a General Incorporated Association

with the present legal status

■ Basic philosophy- to improve the energy security of Japan and contribute to solutions

for global environmental issues including warming

- to promote sound growth of the wind power industries at home and abroad

- to conduct ourselves with strong awareness of responsibility as an industry

group representing our country

- to be accountable and maintain compliance by ensuring the function and

ability to exert influence both internally and externally

■ Composition of Members (as of February 15,2017)

✔ Number of members：312 companies and groups covering whole wind industry

✔ Our members are owning and running approx.85% of wind power generating

facilities in operation in Japan.1

１

Present Status of Wind Power Development in Japan

① Wind power generating facilities in operation： 3,378MW(as of E/March/2017 ：estimated by JWPA)

② Ｐｒｏｊｅｃｔｓ under development & EIA process：10,493MW(as of E/January/2017：surveyed by JWPA)

Project Area MW

Hokkaido 2,533MW

Tohoku 6,834MW

others 1,126MW

Total 10,493MW

Status of EIA MW

Primary consultation 3,213MW

Scoping documents 3,510MW

Draft EIA 3,770MW

Total 10,493MW

Geographical Distribution Progress of EIA Process

＊Summed up figure(①＋②)： 13,871MWThe figure of 10,000MW indicated in “2030 Energy Mix” for wind power generation seems achievable in the early stage of 2020s.

２

Major Challenge ①：Constraints in Grid Connection

Current Issues① Cross-Regional Grid Operation yet to start

The nation wide cross-regional grid operation has been long waited.：－

- rules and regulations to be reformed comprehensively

- OCCTO’s Long Term Vision of Cross-Reginal Network Development

expected to be announced toward the end of March, 2017

② Grid Constraints getting harder in areas with good wind

Hokkaido：New WF shall have battery to avoid variations of output to the grid

Tohoku：Due to a plenty of new installation plans, the lack of thermal capacity

of trunk transmission lines are anticipated ⇒ Concern：Heavy investment

(cost allocation) and 10 years time for construction be required ?

Solutions：The government committee (Grid WG) worked out certain alternative

ideas to cope with the situations. The Wind industry is anxiously awaiting

constructive and feasible proposals by electric utilities/OCCTO based on

such discussions at Grid WG.

３

Major Challenge ①：Constraints in Grid Connection Remark：latest update (as of March 7, 2017)

New proposal by Hokkaido Electric (HEPCO)(announced and agreed in the Grid WG on March 7, 2017)

HPCO proposed a new invitation for additional capacity for grid connection.

① Additional Capacity：1,000MW (1st phase 600MW, 2nd phase 400MW)

② Batteries： - to be installed at the HEPCO’s grid side instead of

each WF(present requirement)

- expected required total capacity of batteries(15%-4h)

for 1st phase; approx.90MW–4h (installed toward FY2022)

for 2nd phase; approx.60MW–4h (to be decided)* battery capacity to be further studied and scrutinized

③ Cost allocation：to be shared by both generators and HEPCO

4

４

Sources: Federation of electric power companies of Japan, transmissions network, http:/www.fepc.or.jp/enterprise/supply/soudensen/sw_index_01/index.html of Japan is machined to base source: federation of electric power companies of Japan transmission network http: /www.fepc.or.jp/enterprise/supply/soudensen/sw_index_01/index.html of

Kamikita

Nishino

Akita

Nishiate separates

Large field

Hakodate

Shimokita

Iwate

Miyagi

West Sendai

South Soma

South Iwaki

New Iwaki

New koga

New Imaichi

New Motegi

East Gunma prefecture

West Gunma prefecture

New Nitta

New SakadoNew Tokorozawa

New Tama

New Chichibu

Shin-Fuji

New Shino F.C

Sakuma F.C.

Higashishimizu F.C.

Shino

Eastern part

Northern part

Gifu

In progress Noto

Kaga

Echizen

Toyone

Mie

East Omi

Reinan

New ikoma

Nanjing city

Keihoku

South fukumitsu

Kihoku

Nose

Nishikyo capital

AnanToyo

Sanuki

Sendai

Awa

West seeding

Mitsuoka mountainShin " okayama

Buzen

South HayakitaWest Futaba

Yamazaki

HinoWestern shimane

Kitakyushu

Western Kyushu Center

Kumamoto

Central Kyushu

Southern KyushuMiyazaki

East Kyushu

Sefuri

New Yamaguchi

Western shimane

New HiroshimaShin-Nishi-Hiroshima

Higashiyama mouth

Chizu

Hayao farToei

Major transformation Substation

Wakkanai

Key transformation Substation with desired establishment

Intersection direct conversion station

500,000V transmission line15.4-275,000V transmission lineDC power transmission lines

Core system with necessary arrangements and enhancement

OCCTO shall work fully to

activate existing inter

regional grid connecting line

To select "wind power

priority area“

such as Hokkaido

To improve grid infrastructure at the selected priority area

５

Improve the grid infrastructures according to the decommissioning of old facilities.

To select “wind power priority area” is also effective for growing up wind power industry at that local area.

Not only cross-regional grid connecting lines, but also local grid lines at good wind resource areas (Hokkaido & Tohoku) are important for wind power promotion in Japan.

(for Reference) Grid issues, in middle / long term：Cost-effective reinforcement of grid infrastructure

＊Source ：JWPA Wind Vision 2016

Major Challenge ② ：EIA Procedure

Current Issues① Longer Process compared with major European countries and US

＊ investigated and prepared by JWPA

② JWPA’s Proposal

1)Reduction to half of EIA survey period and examination period

2)Formalizing advancement of EIA survey (demonstration projects are under

trial jointly by METI and MOE)

3)Revision of criteria for project magnitude (≧10MW to ≧50MW)

4)Rationalizing evaluation items for survey (such as items during construction)

US Germany Spain UK Japan

Criteria ＞50MW ＞50m height& ≧20WTG

>50WTG or <２kmfrom existing WF

>50MWOn shore

≧10MW

Period 1～2Y 2Y 1.5～2Y 1.5～2Y 3～4/5Y

６

≪Topics≫ Offshore Wind Power Development (1)

Overview of Kitakyuushuu Port Project Site

1st Project pursuing Amendmentof Port & Harbor Act just launched

Awarded to：Hibiki wind EnergyConsoprtiumheaded by Kyuden Miraiwith J-Power, Hokutaku,Saibugas, Kyudenko

No. of WTG:max.44WTGsGen. capacity:228.8MWConstruction:expected to start

in 2022

Source: discussion paper of Transport Policy Council of MLIT (Dec.7, 2015)

７

≪Topics≫Offshore Wind Power Development (2)８8

＊Total installed： 60MW＊Total planned：1,926MW

Source：investigated by JWPA

Source：investigated by JWPA

≪for Reference≫ Latest Report by NREL(USA)８9

Source：NREL web site at www.nrel.gov/publications

March 2, 2016

The Japan Wind Power Association (JWPA)

http://jwpa.jp/en

Aiming at Sustainable Expanding Deployment of

Wind power in Japan

— JWPA Wind Vision Report —

10

Scope of JWPA WindVision Report11

Challenges and SolutionsChallenges and Solutions

No. challenges Solutions

1 To achieve grid parity Medium / long term tactics for LCOE reduction

2 To harmonize with grid operation Realistic strategies for grid connection along time line

3 High reliability, Job creation To improve safety, human resources, financing, etc.

Wind Power Energy Resources and Mid/Long Term TargetVer. 4.3 (released by JWPA in June 2014)

‘Long-term Energy Supply and Demand Outlook (2030 Energy Mix)’(released by the Ministry of Economy, Trade and Industry in July 2015)

Recognizing the challenges

Practical tactics for the challengesSafe and stable power supply,

Minimize public burden

JWPA’s basic principlesJWPA’s basic principles

1. To mitigate global warming and secure Japaneses energy security by promoting wind power2. To organize and to grow up wind power industry for promoting wind power3. To act with responsibility as the representative for Japanese wind power industry group4. To establish enough abilities for lobbing, and to keep accountabilities

Contents１2

1. World wind power development trend2. Roadmap for the Wind Power Introduction for Japan,

proposed by JWPA3. Scenario for future wind power in Japan(1) 5 driving forces : Reduce LCOE, Harmonize with electrical grid,

Repowering, Offshore wind, Establishing domestic supply chain

(2) Time & Area : Challenges for grid interconnection by time lines.

4. Future prospects for LCOE reduction in Japan5. Grid issues

In short term: To improve grid operation under cross-area managementIn middle & long term: Cost-effective reinforcement of grid infrastructure

6. To promote Repowering7. To promote Offshore wind power development8. Other challenges : Easing the hurdles

11.36 13.41  14.82  16.22  17.43  18.37 

1.08 

1.51 1.82 

2.12 2.43 

2.74 

3.04 

6.17 

8.44 

10.46 12.17 

13.76 

1.37 

3.97 

5.60 

7.28 

9.00 

10.66 

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

45.00

50.00

2013 2020 2025 2030 2035 2040

その他 太陽光地熱 風力バイオマス 水力再エネ電源比率

SolarWindHydro

Etc.GeothermalBiomassRe‐Energy rate

1. World wind power development trend

• Wind power shall increase more than 1,000GW by 2040 by IEA forecast. • It is the largest among the all kinds of electric power plants.• 2.5 trillion dollars shall be invested for the wind power.• Most of nations with large GDP promote wind power.• COP21 at Paris in Dec.2015 will accelerate the world wind power in further.

Prospects for renewable energies in the world

Source: World Energy Outlook 2015, IEA among, "New Policy Scenario"REN21 Renewables 2015 Global Status Report

Investment estimates in electric world power(2015 to 2040 annual)

Tril

lion

dolla

rs(2

014

rate

s)

Transmission and distributionRenewable energiesNuclear powerFossil-fuel

Investment for wind is 2.5 trillion dollars, which is the largest

Wind Power rank : 1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th 19th

GDP Rank : 2nd 1st 4th 14th 9th 5th 11th 6th 8th 7th 3rd

(Japan)

+0.2

World winds power introduction amount tops 10 countries (2014)

(Italy)(Canada)(Britain)(United State)(China) (Germany) (India)(Spain) (Brazil)(France)

2014 amounts new implementationAggregate total

10,000 kW

12,000

10,000

8,000

6,000

4,000

2,000

+2,320

+490

+530

-0 +230

+170+190 +100 +10 +250

+20

The large GDP top nations promote wind power

(100 million kW)

year

13

2. Roadmap for the Wind Power Introduction for Japan,

proposed by the JWPA

• 10GW prospect at“Energy mix plan”shall be achieved at early 2020s. (3.1GW at 2015 + 7.1GW in the EIA process = 10GW)

• JWPA proposes 36.2GW toward 2030 for the next stage.

2015 year-end: 3,038,000kW

EIA Added: 10,100,000kW

14

3. Scenario for future wind power in Japan(1) 5 Driving forces

To reduce LCOE

To ImproveGrid infrastructure

To promoteRepowering

To promoteOffshore wind

To establish domesticsupply chain

• Achieve grid parity / competitiveness• Mass production achieves volume discount.• To improve capacity factor & availability

• Install at good wind condition area• Aggregation• Inter regional grid operation• Effective control, Output forecast

• To promote new large high performance wind turbines instead of old ones

• To harvest huge offshore wind energy resources

• To activate wind turbine & components industries in Japan

• Job creation by “Green new deal”

Wind power mass

introductionin Japan

• JWPA considers there are 5 driving forces for wind power in Japan• If we can handles them, wind power mass introduction shall be realized.

15

3. Scenario for future wind power in Japan(2) Challenges for onshore wind grid Interconnection by time & area

• For onshore wind, Grid connection has large priority.• Kyushu area has some margin. We have to accelerate this area at first • Hokkaido & Tohoku which have small acceptable capacities now,

we manage to send their electricity to demand/population center (Tokyo).

(Short terms: up to 5 years)- Inter regional grid operation- To use existing pomp up hydro plants

and middle load fossil fired power plants- Out put control for renewable energies- Re-estimation of acceptable capacity

(About long term: 5-15 yers)• Optimization of transmission network to

achieve “Energy mix plan”• To improve inter-reginal grid lines;

Hokkaido/Tohoku: 2.7GWTohoku/Tokyo 3.2GW

Reference: “Master plans workshops interim report on strengthen including inter-regional interconnecting line”(April, 2012, Ministry of economy, trade and industry)

16

150

600

42

20273

285

+4003

+270

+320

Unit: 10,000 kW

Internal acceptable capacity in the area

Additional acceptable capacityusing interregional connection Line

Margin(accelerating benefits)

Onshore wind: 26,6 GW

Maps attribution: J Power HP(http://www.jpower.co.jp/bs/souhenden/about.html)

59

64+48

+25

109

+10

Hokkaido

Tohoku

Kyusyu

Tokyo

4. Future prospects for LCOE reduction in Japan

• We expect cost will decrease after 2020 to 8-9 JPY/kWh toward 2030by mass production and technology innovations.

• Cost reduces moderately until 2020. because construction cost won’t decrease due to big demand for coming Olympic game preparation.

17

Cost estimation by experience curve (cumulative output expansion effect*)

Cost estimation with regard to technology (individual technological innovation effects*)

Introduction of onshore wind power generation(period)

Capital costsOperating and maintenance costs

2.71 GW(March 2013)

300 thousand JPY/kW

6,000 JPY/kW/year

2.94 GW(March 2015)

316 thousand JPY/kW

11,000 JPY/kW/year

10 GW(2020)

263 – 271 thousand JPY/kW

4,800 – 5,220 JPY/kW/year

26.6 GW(2030)

239 – 253 thousand JPY/kW

4,098 – 4,590 JPY/kW/year

Item Generation cost improvement effect

50% increase in swept area -1.99 JPY/kWh

Life extension (20 years 25 years) -1.88 JPY/kWh

Improvement of utilization rate and capacity factor through adoption of CMS

-1.69 JPY/kWh

20% reduction of nacelle weight -1.28 JPY/kWh

Improvement of maintenance efficiency -0.51 JPY/kWh

5% increase in wind turbine efficiency -0.39 JPY/kWh

25% increase in tower height -0.25 JPY/kWh

* Cost calculation for cumulative output expansion effect and individual technological innovation effects is based on completely different approaches.Besides, individual technological innovation effects are estimated by summing maximum values of all elements, while actual attainability is different for each element.

Estimated reduction of wind power generation cost up to 2030JPY/kWh

Influence of rise in construction costs because of Olympics and reconstruction demand

Estimated wholesale electricity price(= achievement of grid parity)

Wind power generation cost

Coal-fired power generation cost

Estimated introduction of wind power generation (right axis)

10 MW

5. Grid issues, in short term :to improve grid operation

• Output curtailment for renewable energies (solar and wind) shall be requested by grid stabilities in Japan now.

• “Hour unit base” is better than “Day unit base”at curtailment.• If we consider solar and wind at harmonizing(sharing), wind power can

get additional acceptable capacity and can reduce the curtailment.

18

AreaWind power introduction

Output suppression rate(suppression days)

<Day unit base>

Output suppression rate(suppression hours)

<Hour unit base>

Hokkaido 1.5 GW25.4％

(74 days)8.5％

(739 hours)

Tohoku 6 GW18.6％

(41 days)4.0％

(370 hours)

Kyusyu 9 GW27.9％

(54 days) 8.2％

(648 hours)

So

lar

po

wer

Wind power

Installed capacity of solar power generation = 38.124 million kWInstalled capacity of wind power generation = 35.678 million kW

Both wind power and solar power outputs grow high together very seldom.This can be handled by output suppression.

Example of measured output of solar power generation and wind power

generation in Germany (2014)

Examples of estimation of wind power introduction and output suppression rate in every area (JWPA)

Wind power generation and solar power generation complement each other. Efficient sharing in a power system is possible, while mutual hindrance in introduction expansion is not likely.

Introduction of wind power generation at a level close to that of solar power generation is possible in areas suitable for wind power generation (Hokkaido, Tohoku, Kyushu) through utilizing the fullest extent of existing equipment.

* In this simulation, outputs of solar power generation and wind power generation are suppressed in such way that residual demand with respect to the actual demand in 2013 (residue of power demand less power generated by solar and wind power plants) does not drop below a set lower limit; as to wind power, the control method is intended for suppression of the output ceiling in a whole area operated by every power company, in units of hours (maximum output suppression control).

* In this simulation, static demand-and-supply balance is considered solely in terms of ‘maintenance of minimum residual demand’ aiming to eliminate the deficit of decrease capacity. Therefore, the following factors are disregarded, and actual wind power introduction and output suppression rate (output suppression time) may be different from the simulated results.Year-to-year variation of power demand conditions. Errors of demand forecast, solar power output forecast, and wind power output forecast (including, for example, a possibility that solar and wind power outputs exceed respective maximum values (2)). Time constraints on start/stop of thermal power generators, hydro power generators, and other conventional power sources (as regards installed capacity and operation methods of power generators, minimum residual demand, introduction and output suppression time of solar power plants, and other data for 2013, the calculations are based on the data shown by 3rd System WG).

Sources: Federation of electric power companies of Japan, transmissions network, http:/www.fepc.or.jp/enterprise/supply/soudensen/sw_index_01/index.html of Japan is machined to base source: federation of electric power companies of Japan transmission network http: /www.fepc.or.jp/enterprise/supply/soudensen/sw_index_01/index.html of

Kamikita

Nishino

Akita

Nishiate separates

Large field

Hakodate

Shimokita

Iwate

Miyagi

West Sendai

South Soma

South Iwaki

New Iwaki

New koga

New Imaichi

New Motegi

East Gunma prefecture

West Gunma prefecture

New Nitta

New SakadoNew Tokorozawa

New Tama

New Chichibu

Shin-Fuji

New Shino F.C

Sakuma F.C.

Higashishimizu F.C.

Shino

Eastern part

Northern part

Gifu

In progress Noto

Kaga

Echizen

Toyone

Mie

East Omi

Reinan

New ikoma

Nanjing city

Keihoku

South fukumitsu

Kihoku

Nose

Nishikyo capital

AnanToyo

Sanuki

Sendai

Awa

West seeding

Mitsuoka mountainShin " okayama

Buzen

South HayakitaWest Futaba

Yamazaki

HinoWestern shimane

Kitakyushu

Western Kyushu Center

Kumamoto

Central Kyushu

Southern KyushuMiyazaki

East Kyushu

Sefuri

New Yamaguchi

Western shimane

New HiroshimaShin-Nishi-Hiroshima

Higashiyama mouth

Chizu

Hayao farToei

Major transformation Substation

Wakkanai

Key transformation Substation with desired establishment

Intersection direct conversion station

500,000V transmission line15.4-275,000V transmission lineDC power transmission lines

Core system with necessary arrangements and enhancement

OCCTO shall work fully to

activate existing inter

regional grid connecting line

To select "wind power

priority area“

such as Hokkaido

To improve grid infrastructure at the selected priority area

19

Improve the grid infrastructures according to the decommission of old facilities.

To select “wind power priority area” is also effective for growing up wind power industry at that local area.

Not only inter regional grid connecting lines, but also local grid lines at good wind resource area (Hokkado & Tohoku) are important for wind power promotion in Japan.

5. Grid issues, in middle / long term : Cost-effective reinforcement of grid infrastructure

6. To promote Repowering

• Old wind turbines (operated for 20 years) shall increase after 2020. Most of them stand at good wind conditions.

• To Promote terminating old turbines and rebuilding new large high performance turbines.

20

1  1  2  4  8  14 31 

46 

68 

93 108 

149 167 

188 

219 

248  256 264  270 

292 

0

50

100

150

200

250

300

350

400

450

500

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040

［10 M

W］

Merits for repowering- To prevent accidents- To improve power output- To keep Japanese wind power installation- Job creation at local districts- To add demand for wind turbine industries

7. To promote Offshore wind power development 21

Wakkanai port(10 MW)

Ishikari Bay new port(100 MW)

Setana port(1.2 MW)

Mutsu Ogawara port(80 MW)

Akita port( 3 MW)(65 MW)

The Sakata port(10 MW) (15 MW)

Iwafune at Murakami city(220 MW)

Kashima port(250 MW)Kamisu (30 MW)

Choshi (2.4 MW) *

Shimonoseki cities Yasuoka(60 MW)

Kitakyushu city (2 MW)Kitakyushu port (500 MW)

Goto city Kabashima (2 MW) *

Fukushima floatingoffshore wind project(2 MW) *(12 MW)

Noshiro port(80 MW)

Experience: 52.6 MWPlanned: 1,392MW

- Offshore wind power development is a good way for mass introduction.- But, it needs efforts to remove the hurdles, such as; long EIA process,

Grid connection, Law modification for general common sea area, Jack up ships, Port qway bearing strength, etc.

Source: including the meeting small commission term energy supply-demand projection (4th time)

Schedule for expansion of offshore wind power introduction

Source: compiled by JWPA

FY2015 – 2030

Maintenance of transmission lines

Formulation of rules for sea area utilization

Area zoning for wind turbine facilities

Reconciliation among interested parties in environmental assessment

Public recruitment of business operators

Construction works in Area 1

Construction works in Area 2

Construction works in Area 3

Arrangement of base ports

Arrangement of SEP ships and other special purpose ships

Framework

Construction works

2 million kW

Area 1

6.2 million kW

Area 2

8.5 million kW

Area 3

10 Million kW

Area 4

Area 1 Area 2 Area 3 Area 4

Recruitment for Area 1 Recruitment for Area 2 Recruitment for Area 3

Area 1

Area 2

Area 3

Area 1 Area 2 Area 3 Area 4

8. Other challenges : Easing the hurdles22

Easing regulations against wind power introduction in Japan. (Expanding wind farm sites candidates all over Japan)

R&D for innovative wind turbines matching Japanese climate

and terrains, etc. (Aiming at cost effective facilities)

Improving project management skill, from development through

to O&M (Improvement of project quality)

Establishing supply chain of wind industry and promoting domestic wind related industries.(Bringing-up dmestic industries)

Promoting cost-effective and diversified financing sources to sustainable investment (Stimulating robust investment)

Contribution for preventing global warming, securing higher social acceptance , contributions for local economies. (Getting national consensus and citizen support)

Thank you !

2.4 MW offshore wind turbine of NEDO’s project at Choshi in Ibaragi pref. Source: JWPA photo contest in 2013