Japan to resume offshore wind power auctions by year-end after overhauling rules

TOKYO, June 24 (Reuters) – The Japanese government plans to resume public auctions for offshore wind projects by the end of this year, after revising rules to attract a wider range of bidders and encourage faster development new infrastructure.

The resumption follows the abrupt suspension of an auction in March for an offshore wind farm in Happo-Noshiro, northern Japan. Industry sources say the suspension came amid criticism from companies over the lack of clarity around the bidding process.

Criticism has mounted following the government’s selection in late December of three consortia all led by Mitsubishi Corp (8058.T) to operate three offshore wind projects in Akita, northern Japan, and Chiba, near Tokyo. Read more

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Proposed changes, presented by the Industry and Land Ministries to an expectations panel on Thursday, would give a higher rating to operators who submit earlier start dates and set a limit on bids that a consortium can win when multiple ocean areas are auctioned.

To discourage bids that focus solely on price, the evaluation process will treat all bids that are below market price with an equal score in their evaluation on price.

The government says the changes would be necessary because Japan needs to develop renewables faster in light of Russia’s invasion of Ukraine, which has sent energy prices skyrocketing.

Offshore wind power is a key part of Japan’s decarbonization strategy and the government plans to install up to 10 gigawatts (GW) of offshore wind capacity by 2030 and up to 45 GW by 2040 to reduce emissions.

A number of global wind energy companies such as Danish Orsted (ORSTED.CO) and German RWE (RWEG.DE) are keen to enter the Japanese market.

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Reporting by Yuka Obayashi; Editing by Sam Holmes

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