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Danish wind turbine maker nixes Japan plant on proposed order limits

Nikkei Asia|Mamoru Tsuge|July 17, 2022
JapanGeneral
Denmark's Vestas Wind Systems scrapped plans in Japan to build an offshore wind turbine plant following regulatory proposals that would limit the size of projects that top players can take on, Nikkei has learned. The plant planned in Nagasaki Prefecture was slated to receive subsidies from the Ministry of Economy, Trade and Industry, but Vestas recently withdrew its application for the assistance.
 

European players pull out as competition rules make projects less profitable
 
TOKYO -- Denmark's Vestas Wind Systems scrapped plans in Japan to build an offshore wind turbine plant following regulatory proposals that would limit the size of projects that top players can take on, Nikkei has learned.
 
The plant planned in Nagasaki Prefecture was slated to receive subsidies from the Ministry of Economy, Trade and Industry, but Vestas recently withdrew its application for the assistance.
 
European peer Siemens Gamesa Renewable Energy also has told Japanese power operators that it will shelve plans to supply offshore wind turbines. Vestas and the Siemens Group rank fifth and sixth, respectively, in the global market. Chinese enterprises occupy the top four places, but they mostly do business domestically.
 
These withdrawals come in response to a proposal for new bidding rules covering offshore wind farms. Japan would limit bids from any single operator for a group of sites to 1 gigawatts, as Tokyo aims to prevent the monopolization of ... more [truncated due to possible copyright]
     
European players pull out as competition rules make projects less profitable
 
TOKYO -- Denmark's Vestas Wind Systems scrapped plans in Japan to build an offshore wind turbine plant following regulatory proposals that would limit the size of projects that top players can take on, Nikkei has learned.
 
The plant planned in Nagasaki Prefecture was slated to receive subsidies from the Ministry of Economy, Trade and Industry, but Vestas recently withdrew its application for the assistance.
 
European peer Siemens Gamesa Renewable Energy also has told Japanese power operators that it will shelve plans to supply offshore wind turbines. Vestas and the Siemens Group rank fifth and sixth, respectively, in the global market. Chinese enterprises occupy the top four places, but they mostly do business domestically.
 
These withdrawals come in response to a proposal for new bidding rules covering offshore wind farms. Japan would limit bids from any single operator for a group of sites to 1 gigawatts, as Tokyo aims to prevent the monopolization of projects and open the market to midsize businesses.
 
But as this change would diminish the scope of offshore wind projects taken on by a single operator, big European suppliers could face greater difficulty finding profitable orders. As power generation equipment makers would win smaller orders from power operators, building factories in Japan to mass-produce turbines becomes less feasible compared with simply shipping the turbines to the country.
 
The proposal comes after a consortium led by Mitsubishi Corp. won in December all three projects put up for bid under the government's first major auction for offshore wind contracts. Mitsubishi prevailed because its proposals beat competitors on pricing.
 
This prompted critics to warn that big companies may dominate wind projects, discouraging smaller businesses from participating in the clean energy initiative. The government formulated draft rules last month and seeks to finalize the directives by the end of the year.
 
Wind power is a leading alternative energy source for reducing carbon output. Japan aims to field 5.7GW of offshore wind farms by fiscal 2030, a scope equivalent to a six-reactor power plant.
 
But Vestas, which had regarded Japan as a promising market, appears to be revising its strategy. Top suppliers such as Vestas and Siemens distancing themselves from the Japanese market would stymie the country's decarbonization efforts.

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Source:https://asia.nikkei.com/Busin…

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