Published: September 2, 2025 | Updated: June 20, 2026
COST & COMMERCIAL VIABILITYEvaluating the profitability of offshore wind projects requires close attention to cost-related indicators such as CAPEX, OPEX, LCOE, and IRR. In Japan’s designated Promotion Zones, however, publicly available cost data remain scarce, leaving investors and developers with limited information for decision-making.
This article estimates CAPEX, OPEX, LCOE, and IRR for the Goto City Offshore Floating Wind project (Spar, 16.8 MW, Nagasaki) using DeepWind’s proprietary cost model, which references the NEDO cost model and NeoWins site data based on representative conditions including water depth, distance to shore, and port distance.
This article focuses on cost structure, not project progress or policy background. For the project overview:
👉 Goto City Offshore Floating Wind Power Project
Note: This article presents an indicative analysis based on the cost model and assumptions available at the time of writing.
For the latest cost assumptions and updated relative positioning of projects, please refer to the following Pillar article.
👉 Cost Realities of Japan’s Offshore Wind: Analyzing LCOE and IRR Across 12 Promotion Zones
1. Area Overview
- Area Name: Nagasaki Goto City Offshore
- Location: Southeast Offshore, Nagasaki
- Estimated Capacity: 16.8 MW
- Status: Promotion Zone
- Developer: Toda Corporation, ENEOS, Osaka Gas, INPEX, Kansai Electric Power, Chubu Electric Power
2. Assumptions (Representative Values)
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) | 131 m | Depth at representative point |
| Distance to Shore (km) | 7.0 km | Shortest distance to landfall point |
| Distance to Port (km) | 10.8 km | Straight-line distance to assumed O&M port |
3. CAPEX / OPEX Estimates
CAPEX and OPEX were independently estimated by DeepWind with reference to JWPA developer survey results, the NEDO cost model, and international benchmarks (DeepWind estimate).
Note: LCOE, IRR, and OPEX have been updated following a WACC revision (3% → 4%) and model update in June 2026.
| Floating Type | Estimated CAPEX | Estimated OPEX |
|---|---|---|
| Spar | Approx. JPY 22.6 B | Approx. JPY 460 M per year |
4. LCOE Estimate
LCOE was independently estimated by DeepWind using the proprietary cost model and NeoWins data.
| Floating Type | Gross CF | WACC | Estimated LCOE |
|---|---|---|---|
| Spar | 31% | 4% | 48.5 JPY/kWh |
An LCOE of 48.5 JPY/kWh places Goto City among the most capital-intensive sites in Japan’s Promotion Zone portfolio. The combination of 131 m water depth, Spar foundation complexity, and a low capacity factor of 31% creates a structurally challenging cost profile. Achieving DSCR ≥ 1.35x under current lender risk appetite would require either a substantially higher power price or a step-change reduction in floating wind CAPEX — neither of which is available under the current FIT framework.
5. IRR Estimate
| Price Condition | Estimated IRR | Power Selling Price | Assumed Operating Period |
|---|---|---|---|
| Bid Price | 0.8% | 36 JPY/kWh | 30 years |
| Breakeven Price | 4.0% | 48.5 JPY/kWh | 30 years |
6. Profitability Rating (DeepWind Estimate)
| Evaluation Metric | Score (★1–5) | Result |
|---|---|---|
| Profitability (Bid Price) | ★ | Unviable |
| Overall Rating | D Rank | Not commercially viable under current conditions; major cost reductions or additional policy mechanisms required. |
Goto City is Japan’s floating wind proving ground — but the path to commercial scale cannot be opened by project economics alone.
At WACC 4%, the 48.5 JPY/kWh LCOE for a Spar-based 16.8 MW project reflects the structural cost challenge of pre-commercial floating wind. Water depth of 131 m exceeds the practical limit of fixed-bottom foundations, making the Spar choice technically defensible — but not yet economically viable at this scale.
An IRR of 0.8% at the 36 JPY/kWh bid price is far below the revised WACC of 4%, which was raised following the Round 1 Mitsubishi exit as a bankability signal. For floating wind specifically, the WACC revision makes an already difficult economics case materially harder. Commercialization at Goto City depends on prior unlocking of cost reduction levers: volume manufacturing, design standardization, and dedicated port infrastructure — none of which exist at the required scale today.
Conclusion
This analysis reviewed the cost structure of the floating offshore wind project off Goto City, Nagasaki, evaluating profitability from CAPEX, OPEX, LCOE, and IRR perspectives. At WACC 4%, LCOE reaches 48.5 JPY/kWh. At the auction bid price of 36 JPY/kWh, the project IRR is 0.8% — well below the cost of capital.
The combination of floating foundation costs and low gross capacity factor (31%) creates a structurally challenging economics profile. Relative comparison with other Promotion Zones provides a fuller picture of Japan’s offshore wind investment landscape.
👉 Offshore Wind Cost Structure and Economics: A Structural Guide for Japan (framework for understanding Japan’s cost drivers)
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
Related DeepWind Articles
- Offshore Wind Cost Structure and Economics: A Structural Guide for Japan
- Floating Offshore Wind Platform Types: Key Design Choices for Japan
- Goto City Offshore Floating Wind Power Project
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