In its 'A Renewables Path to Japanese Energy Security in a Post Nuclear Era' report, IEEFA found that by 2030, Japan could host 10GW of offshore wind, enough to supply baseload power to a country where energy demand is falling.
"The real opportunity for Japan lies in offshore wind, a huge potential resource that is currently not utilised and has been hugely underestimated by the market, given the slow pace of onshore wind development over the past five years," said IEEFA.
"The absence of land constraints and the inherent high utilisation rates of wind-powered generation are all in offshore wind's favour and will ultimately allow offshore wind to contribute to baseload generation.
"Offshore wind's inherent absence of land constraint issues works in its favour, as do its utilisation rates [capacity factors] of 45% to 50%, which indicate it can contribute to baseload power," the report found.
By 2030, 35% of Japan's electricity demand could be met by renewable power, IEEFA said, if there is a strong policy push in that direction.
"It requires a major lowering of regulatory and grid barriers to renewable energy projects, changes that will allow Japan to tap capital markets to support national renewable energy programmes," IEEFA said.
IEEFA noted that since the Fukushima nuclear incident in 2014, Japan has reduced its reliance on nuclear to practiacally zero, while fossil fuels increased to provide 82% of demand.
"This has contributed to a reversal in its trade balance from 30 years of trade surplus to a deficit that reached $116 billion in 2014," according to IEEFA's report.
In 2015, renewable power, including wind, solar, hydro, geothermal, waste and biofuels, contributed approximately 17% of Japan's demand, with wind providing just 0.5%.
"Faced with long lead in times for environmental permits and local agreements, [onshore] wind capacity development has been left behind," IEEFA said.
"In Japan, with just five years of pilot development, offshore wind capacity is only just beginning, but following cost reductions and industry experience in Europe, it has the potential to grow significantly in the coming years (as is about to happen in China).
"The Japan Wind Power Association roadmap for development sees 700MW of offshore capacity by 2020, including 100MW of floating capacity. By 2030 it envisages 10GW of offshore capacity in total, including 4GW of floating capacity," the report said.