The stake that sticks up gets hammered down.
It’s a literal translation of an old Japanese proverb and its true meaning is far more blunt. Namely – if you stand out, you will be subject to criticism.
Spare a thought then for Premier Shinzo Abe, who has recently reaffirmed his commitment to undertake an all out assault on the domestic economy in a bid to stop its slow and steady slide.
As part of the plan, Abe is really going for broke. By employing a tactic that will see him fight financial malaise on multiple fronts, he’s looking to tackle fiscal, monetary and exchange stimulus and in doing so, shake the country out of its current woes.
A bold and ambitious plan. And something that, when combined with the rising tension and increasingly open hostility shown between Japan and neighbouring China, suggests that the country isn’t going to be out of the international spotlight anytime soon.
Whatever the case, it’s evident that Abe cares little about the international repercussions and in the process is about to undertake a significant gamble.
For the energy markets, and for wind in particular, that’s especially significant.
And rather timely too. Particularly following recently announced plans to build an additional 1GW in offshore power, off the coast of Fukushima.
The plans take advantage of a generous feed in tariff that was introduced back in July 2012 and require utilities to purchase electricity produced from offshore farms at up to Y42 per kWh.
That’s a major incentive for developers and for the supply chain, since it’s over twice the rate of onshore domestic wind farms and is widely considered to be the highest in the world.
However, these ambitious construction plans are still in their infancy and while the incentives are high, so too are the risks.
To date, many within the market have always considered the possibilities locked within the Japanese market to be imminently bankable – a solid and safe bet.
However, right now the international trading markets are more fragile than we’d all like to think and their success or failure can have a direct correlation on any ambitious energy plan. Especially those that involve working in deep water, operating close to one of the world’s most active fault lines.
Yes, the Japanese energy markets needed fresh impetus after decommissioning of a substantial chunk of its domestic nuclear sector and yes, domestic Japanese wind has experienced a lull over recent years. So something needed to be done.
However, given the seismic changes that are currently being played out in the economic markets and as international tensions between two of the world’s major superpowers escalate, the nascent Japanese offshore wind sector needs to be nurtured.
If it’s not, then the ambitions of other emerging Asian energy economies – who are also looking to walk the tightrope of attracting inward investment while fostering future domestic manufacturing growth – might just pip them to the post.
Recent activity emerging in the waters around Korea is a case in point.
While Japanese ambitions within offshore wind should be applauded, let’s hope that, in the process, they’ve not bitten off more than they can chew.
The Inflation Reduction Act has sparked major optimism in the US renewables sector, but wind installations still fell 37% last year.