TOKYO (BLOOMBERG) - Japan is considering laying undersea cables to link offshore wind power generation with demand centres as it seeks to expand renewable energy.

An expert panel from Japan's Ministry of Economy, Trade and Industry was scheduled to hold its first meeting on the plan on Monday (March 15), according to a document on its website. The project could cost as much as one trillion yen (S$12.3 billion) but is cheaper than running cables over land, Nikkei reported over the weekend.

Shares of equipment-related companies and electricity utilities rose with heavy machinery maker IHI and Electric Power Development advancing 2.7 per cent and 2 per cent, respectively. The benchmark Topix index increased 0.9 per cent.

Japan is seeking to more than quadruple offshore wind capacity to as much as 45 gigawatts in 2040 from 10 gigawatts in 2030. Reaching that goal will require a vast expansion of a sector that has a current capacity of about 20 megawatts and Japan will need to attract both domestic and overseas investment.

About 80 per cent of that offshore capacity is expected to be built in Hokkaido, Tohoku and Kyushu regions, which will require a way to transport the power to the major demand centres in the Tokyo and Kansai areas.

Offshore wind, along with hydrogen and ammonia, are seen as key sources of energy Japan will use to achieve its 2050 decarbonisation target, as the densely populated nation has limited onshore space for solar and wind development.