Japan Restarts Offshore Wind Power Auctions with Updated Rules

Japan has resumed public auctions for offshore wind power projects under revised rules aimed at encouraging a wider range of operators and accelerating the development of infrastructure, the industry and land ministries said on Wednesday. 

The government has launched the second major round of auctions to select operators for four new areas capable of generating 1.8 gigawatts (GW) of offshore wind power. 

The areas include the 356 megawatt (MW) offshore wind farm in Happo-Noshiro, off Akita prefecture in northern Japan, which initially was put for auction last December, but the process was suspended in March after complaints from businesses about the lack of clarity around first-round bidding. 

Other areas are off Oga-Katagami-Akita (336 MW) and Murakami-Tainai (700 MW) in northern Japan and off Saikai (424 MW) in southwestern Japan. 

• Japan's First Utility-scale Offshore Wind Farm Starts Commercial Operations

The auction runs from Wednesday until June 30, with the result expected in March 2024, though it could come next December if there is no scheduling clash between the two projects in Akita using the same port. 

Japan's offshore wind power market is set to grow as the government has set a goal of installing up to 10 GW of offshore wind capacity by 2030, and up to 45 GW by 2040. 

But the auction process has been delayed due to criticism by the industry about the government's selection last December of three consortiums, all led by Mitsubishi Corp to operate all three areas in the first major round of auctions. 

After lengthy discussions, the ministries amended the bid rules in October, giving a higher evaluation score to operators that submit earlier start-up dates and setting a 1 GW limit on bids that one consortium can win when multiple ocean areas are auctioned. 

Global companies, including Denmark's Orsted and Germany's RWE, have shown an interest in the Japanese market, but industry sources say the limit on how much one group can win is discouraging because it reduces the potential for economies of scale.

(Reuters - Reporting by Yuka Obayashi; Editing by Robert Birsel)

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