Oil Report

Japan wind farm building slows on tighter rules

TOKYO, June 24 (Reuters) - Japan’s wind power industry installed only 185 megawatts (MW) of capacity in the year ended in March, 2008, less than half of what it installed in 2006/07, as tighter regulations delayed the contruction of wind farms.

The stricter guidelines, which stipulate that wind turbines must clear the same safety regulations that apply to tall buildings, were introduced last summer following a scandal in 2005 over falsified engineering data for apartment blocks. Critics say the new rules are costly to comply with and often unnecessary.

The New Energy and Industrial Technology Development Organization (NEDO), a government-affiliated research institute, said on Tuesday that Japan’s wind power installed capacity totalled 1,675 MW as of March, with 1,409 turbines.

This is still far behind the government’s target for wind power installed capacity to reach 3,000 MW by 2010/11 and bring the country’s reliance on new energy sources -- solar energy, wind and biomass -- to 3 percent of its primary energy supply by 2010/11 from 2 percent in 2005/06.

Japan, the world’s fifth-biggest emitter of greenhouse gases, will also be able to reduce emissions, blamed for global warming, by shifting away from fossil fuels.

Japan is under pressure to meet its target under the Kyoto Protocol on climate change, which obliges 37 developed nations to cut emissions by an average 5 percent below 1990 levels by 2008-12.

“It is still possible to meet the target for fiscal 2010,” said Mitsutoshi Yamashita, a deputy director at the Ministry of Economy, Trade and Industry’s wind power sector devision.

Tokyo Electric Power Co's 9501.T (TEPCO), Japan's biggest utility, has said it plans to build a wind farm for the start of commercial operation in October 2011.

“It’s good to see an electric power company seeking a better mix of energy sources and tapping into the wind power sector,” Yamashita said. Similar plans are feasible for power companies that supply energy to major cities and there have enough demand to absorb the volatility of wind power, he said.

TEPCO last month announced the plan to build its first wind farm with total capacity of 18.37 MW in Shizuoka prefecture, west of Tokyo, becoming Japan’s first electric power company to do so.

Previously, all the dominant players in Japan's wind power market were wind power developers, such as Japan Wind Development Co 2766.T and Eurus Energy Holdings Corp, a joint venture between TEPCO and trading house Toyota Tsusho Corp 8015.T, and electricity wholesaler Electric Power Development Co 9513.T as well as smaller regional entities.

Japan’s total capacity is less than a third of that in China, Asia’s biggest wind power market, according to data from the Global Wind Energy Council.

The global wind industry installed over 20,000 MW in calendar 2007 in a continued boom on higher fuel costs led by the United States, China and Spain, bringing global capacity to 94,123 MW. (Reporting by Risa Maeda; editing by Sophie Hardach)