Introduction
Evaluating the profitability of offshore wind projects requires close attention to cost-related indicators such as CAPEX, OPEX, LCOE, and IRR.
However, in Japan’s designated Promotion Zones, publicly available cost data remain scarce, leaving investors and developers with limited information for decision-making.
In this article, we assess the Chiba Choshi Offshore Wind, estimating CAPEX, OPEX, LCOE, and IRR using the NEDO cost model, based on representative site conditions including distance to shore, water depth, and distance to port.
While these figures are independent estimates, they provide useful insights into the characteristics of this zone and a basis for relative comparison with other areas.
This article focuses not on project progress or policy background, but on the cost analysis. If you would like to learn more about the project overview of the Chiba Choshi Offshore Wind Project, please see the article below.
👉 Chiba Choshi Offshore Wind Project
1. Area Overview
- Area Name: Chiba Choshi Offshore
- Location: Northeast Offshore, Chiba
- Estimated Capacity: 403 MW
- Status: Promotion Zone
- Developer: Mitsubishi Corporation Offshore Wind Ltd., C-TECH CORPORATION, Mitsubishi Corporation
2. Assumptions (Representative Values)
In this article, the representative point was set at the center of the designated promotion area polygon based on its coordinates. Water depth and distance conditions were estimated using data from NeoWins.
| Item | Estimated Value | Notes |
|---|---|---|
| Water Depth (m) | 13 m | Depth at representative point |
| Distance to Shore (km) | 5.1 km | Shortest distance to landfall point |
| Distance to Port (km) | 5 km | Straight-line distance to assumed O&M port |
3. CAPEX / OPEX Estimates
CAPEX and OPEX were independently estimated by DeepWind with reference to NEDO’s Offshore Wind Cost Model (October 2024).
| Foundation type | Estimated CAPEX | Estimated OPEX |
|---|---|---|
| Monopile | USD 1080 Million | USD 19 Million/year |
4. LCOE Estimate
The LCOE was independently estimated by DeepWind with reference to NEDO’s Offshore Wind Cost Model (October 2024) and NeoWins data.
| Foundation type | Estimated LCOE |
|---|---|
| Monopile | 117 USD/MWh |
5. IRR Estimate
| Price conditions | Estimated IRR | Power Selling Price | Assumed Operating Period |
|---|---|---|---|
| Bid Price | 5.8 % | 16.49 yen/kWh | 25 years |
| Expected Price (using market transactions or corporate PPAs) | 7.0 % | 18 yen/kWh | 25 years |
6. Profitability Rating (DeepWind Independent Evaluation)
| Evaluation Metric | Score (★1–5) | Result |
|---|---|---|
| Profitability (Bid Price) | ★★ | Challenging |
| Profitability (Expected Price) | ★★★ | Neutral |
| Overall Rating | B Rank | At the bid price, profitability is limited and contingent on technical and policy support; however, under the right conditions, the project offers potential viability. |
Conclusion
The Chiba Choshi Offshore Wind Promotion Zone illustrates both promise and challenges from a cost perspective. Favorable site conditions, such as shallow waters and short distances to shore and port, support development potential. However, under the awarded bid price, profitability remains constrained with an estimated IRR of 5.8%. At an expected market or corporate PPA price, the IRR improves to 7.0%, indicating that cost reductions, supportive policies, and flexible offtake strategies will be essential to unlock the project’s viability.
DeepWind will continue to deliver independent cost assessments of Japan’s offshore wind promotion zones, helping investors and developers benchmark opportunities and better understand the market’s evolving economics.
If you would like to compare the CAPEX, OPEX, LCOE, and IRR of other Promotion Zones, please also check out this summary article.
🌊 Cost Analysis of Japan’s 12 Offshore Wind Promotion Zones
Explore more categories at DeepWind:
- 🔍Market Insights – Understand the latest trends and key topics in Japan’s offshore wind market
- 🏛️Policy & Regulations – Explore Japan’s legal frameworks, auction systems, and designated promotion zones.
- 🌊Projects – Get an overview of offshore wind projects across Japan’s coastal regions.
- 🛠️Technology & Innovation – Discover the latest technologies and innovations shaping Japan’s offshore wind sector.
- 💡Cost Analysis – Dive into Japan-specific LCOE insights and offshore wind cost structures.
