The fourth round is expected to be launched in July 2025, but the spaces are not clearly identified.
In December 2024, the results for Round 3 of Japan’s offshore wind auction process were announced by the Ministry of Economy, Trade and Industry (METI) and Ministry of Land, Infrastructure and Transport and Tourism (MLIT).
What was a very competitive auction round saw awards made to two consortia. The first, the Tsugaru Offshore Energy Consortium, consists of JERA, Green Power Investment and Tohoku Electric. It secured an award for 615 MW of capacity from the Sea of Japan (South), Aomori project. The second, Yamagata Yuza Offshore Wind LLC, consisting of Marubeni, Kansai Electric, BP, Tokyo Gas and Marutaka, secured an award for 450 MW of capacity from the Yuza, Yamagata project. Both projects have a committed commercial operation date of June 2030 and will provide power at a price of ¥3/kWh (US$0.19).
Watson Farley Analysts
White Law Firm Analysts
WFW says that, in what remains a challenging global market for steady and floating offshore wind, the final results of Round 3 “represent a modest, but vital, step forward and in the Japanese government’s aim to achieve wind carbon neutrality until 2050. ” They say that the main points of the next auction round, round 4, have not yet been announced, but it is expected to happen in 2025 and the allocation sites through Meti and MLIT come with spaces known as “promising spaces” in Hokkaido.
METI has also learned about potential sites in Aomori, Chiba and Iwate, among other prefectures, but they are not expected to be decided for the fourth circular and will most likely focus on later circulars of the auction process. If the fourth round follows a similar design to the previous circulars, the deadline for submissions would be July 2025 and successful proposals are expected to be announced in December. However, the timing could be influenced by adjustments to the operational bidding rules, i. e. on which the overall design of each set of bidding rules for an express auction site is based, which should come into force in 2025.
According to WFW, the Japanese government is amending the Marine Renewable Energy Law that governs the auction procedure for wind energy on the high seas. In November 2024, Meti and MLIT issued an RFP in the third proposed edition of the operational guidelines for the auctions for the occupation in the general one in general areas (Operational auction guidelines) that govern wind projects on the high seas.
Some of the key amendments that are proposed include changes to the evaluation of project schedules, including proposed commercial operation dates and whether early dates will receive favourable consideration; derisking measures; deposits; and the issue of ‘zero premiums.’
Other proposed adjustments come with adjustments to the value adjustment mechanism; a measure of flexibility in the allocation plans; prices settings (including the proposed definition of “premium level”); and site studies will be provided through Japan Oil, Gas and Metals National Corp.
White & Case also expects the fourth round auctions to occur in 2025 and agreed that it is not yet transparent which slots will be selected for the fourth round auctions; And what rule adjustments will be implemented for Ronta Ronta auctions.
“The current promising zones, which are potentially candidate areas for the Round 4 auctions, include five areas in Hokkaido, such as Matsumae,” say White & Case, but note METI and MLIT are still discussing the possible rule changes for the Round 4 auctions, which, it expects, could include points awarded to early CODs, price indexation and deposit money.
“Bidders looking to participate in the Round 4 auctions will need to closely watch the discussions being undertaken at, for example, the joint meetings held by METI and MLIT,” they say.
The 30-day period for public comment ended on 30 December 2024, and the results of the consultation were not evident as this article was written, but WFW says it is important the amendment process be concluded by the end of March 2025 (being Japan’s fiscal year end) for Round 4 to proceed smoothly in 2025.
The effects of round 3 adhere to those of Round 2, which were announced in December 2023. Consortiums composed of RWE, Mitsui and Osak Winding parks on the high seas as a component of the moment on the wind coast from Japan. Training
December 2024 also saw Vestas confirm it has secured a 315-MW order for the Oga Katagami Akita offshore wind project in Akita Prefecture, which was awarded as part of Round 2. The contract includes 21 V236-15.0 MW turbines as well as a long-term service agreement designed to ensure optimised performance of the assets and is Vestas’ first firm order for its V236-15.0 MW turbine in the Asia Pacific region, and its first firm order for a project to be developed under the Japanese government’s offshore wind auction programme.
*Watson Farley & Williams analysis of the auction can be found here
**White & Case’s analysis of the auction can be found here.
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