Japan plans to resume public auctions for offshore wind power projects by the end of this year, after revising rules to draw a wider range of bidders and encourage the faster development of new infrastructure.
Tokyo wants to drive and accelerate the development of new offshore wind projects and has drafted new regulations intended to encourage greater competition in the sector and limiting the ability of a single bidder to secure multiple projects in a single application.
The planned changes come after a consortium led by a subsidiary of Mitsubishi Corporation was awarded contracts for all three areas off the coasts of Akita and Chiba prefectures in the government’s first major bid process for wind projects in December.
The Mitsubishi consortium offered much cheaper power than its rival bidders, but the outcome highlighted how pricing alone overshadowed other aspects of a tender proposal, such as a shorter time frame for implementation, Nikkei Asia reported.
This was followed in March by the sudden suspension of an auction for an offshore wind farm in Happo-Noshiro in northern Japan. Reuters reported industry sources as saying the suspension came amid criticism from businesses about the lack of clarity around the bid process.
This auction to select the developer of up to 356 megawatts of offshore wind capacity in the Happo-Noshiro zone off Akita prefecture had an original deadline of 10 June before the government abruptly pulled the plug.
A ministerial panel was subsequently tasked with considering changes to the offshore wind bidding process with the aim of attracting more contractors that would in turn accelerate such projects being brought into operation.
The Tokyo administration wants to make renewable energy a major source of power generation to help reach its goal of net-zero greenhouse gas emissions by 2050, and the timely installation of offshore wind projects is seen as key to this strategy.
Bidders are judged on a 240-point scale that includes points for pricing and operational feasibility, with those that receive the highest score being awarded the project.
The proposed new rules would apply to bidding exercises that encompass multiple offshore areas, limiting a single bidder or consortium to tender for up to 1 gigawatt of capacity. Once that cap is reached, its bids for other sites in that offering would be invalidated.
The two government agencies issuing the rules — the Ministry of Economy, Trade & Industry and the Infrastructure Ministry — intend to give more weight within the 240-point score process to how quickly a project can be developed.
Pricing will still account for 120 points, but the ministries will disclose in advance the price for which an operator can receive all those points. Even if a bidder were to beat that price, no more than 120 points can be awarded.
A public consultation will be held once the ministries have tweaked their draft recommendations that were unveiled on Thursday, with the aim of finalising the new regulations ahead of a proposed offshore wind project bid round by the end of the year.
Japan is targeting 10 GW of offshore wind by 2030 and as much as 45 GW by the end of the next decade. Its 6th Strategic Energy Plan envisages renewables accounting for between 36% and 38% of its power generation mix in 2030.
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