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 Nigata Murakami Tainai Offshore Wind, estimating CAPEX, OPEX, LCOE, and IRR using on DeepWind’s proprietary cost model which references the NEDO cost model and international benchmarks, 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 Nigata Murakami Tainai Offshore Wind Project, please see the article below.
👉 Nigata Murakami Tainai Offshore Wind
| Revision History |
| Nov. 2025: Updated CAPEX&OPEX model and LCOE&IRR recalculation. |
1. Area Overview
- Area Name: Nigata Murakami City and Tainai City Offshore
- Location: Northwest Offshore, Nigata
- Estimated Capacity: 684 MW
- Status: Promotion Zone
- Developer: MITSUI & CO, RWE, Osaka Gas
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) | 25 m | Depth at representative point |
| Distance to Shore (km) | 2.4 km | Shortest distance to landfall point |
| Distance to Port (km) | 10.9 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’s developer survey results and international benchmarks.
| Foundation type | Estimated CAPEX | Estimated OPEX |
|---|---|---|
| Monopile | Approx. JPY 559 B | Approx. JPY 9.4 B per year |
4. LCOE Estimate
The LCOE was independently estimated by DeepWind with reference to NEDO’s Offshore Wind Cost Model and NeoWins data.
| Foundation type | Gross CF | WACC | Estimated LCOE |
|---|---|---|---|
| Monopile | 34% | 3% | 25.4 JPY/kWh |
5. IRR Estimate
| Price conditions | Estimated IRR | Power Selling Price | Assumed Operating Period |
|---|---|---|---|
| Bid Price | ー | 3 JPY/kWh | 25 years |
| Modeled Price (using market transactions or corporate PPAs) | 2.8 % | 20 JPY/kWh | 25 years |
| Breakeven Price | 3.0% | 25.4 JPY/kWh | 25 years |
6. Profitability Rating (DeepWind Independent Evaluation)
| Evaluation Metric | Score (★1–5) | Result |
|---|---|---|
| Profitability (Modeled Price) | ★ | Unviable |
| Overall Rating | D Rank | Unprofitable under current conditions; major cost reductions or technological innovation needed. |
Conclusion
In this analysis, we evaluated the profitability of the offshore wind Promotion Zone off Murakami and Tainai in Niigata Prefecture based on CAPEX, OPEX, LCOE, and IRR. Although the area benefits from relatively favorable site conditions, including a water depth of around 25 m, the gross capacity factor remains low at 34%. As a result, the estimated LCOE is 25.4 JPY/kWh, and the IRR is 2.8%, indicating that the project is not economically viable under current conditions.
Going forward, significant cost reductions, additional policy support, and the potential use of corporate PPAs will be key factors determining investment feasibility.
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
Weekly digest with actionable insights for investors, developers, and stakeholders in Japan’s offshore wind. 🎁 Welcome gift: Japan Offshore Wind: 2025 Market Outlook (PDF)📩 DeepWind Weekly
- 🔍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.
