Japan unveils winners of Round Two, kick-starts Round 3

Clarksons head of renewables strategy David Matthews says completion of the second Japanese offshore wind solicitation was a “significant step” towards the country achieving its renewable energy goals. “Completion of Japan’s second offshore wind auction underscores its commitment to expanding its offshore wind sector,” he says. “All of the available capacity in the auction was awarded, reflecting strong interest and competition in the sector.”

As Mr Matthews also notes, although Japanese entities continue to dominate their home market, the participation of RWE introduces international collaboration and expertise into the Japanese offshore wind landscape. He says the pricing, albeit high, aligns with the Japanese government’s requirements for advancing its decarbonisation agenda. “Japan can also learn from Europe, by considering larger projects in future,” he says, “rather than multiple small to medium-sized ventures.”

“The second auction was significant milestone,” says Mr Matthews. “The key takeaways are the importance of collaboration, competitive pricing and efficient project timelines.”

Not long after the results of Round 2 were announced, the Japanese government opened the third round of project allocations. As analysts from Esgian Offshore Wind note, doing so is important if Japan is to meet its target of 10 GW of offshore wind by 2030.

The two sites identified for Round 3 are sufficient for 1,050 MW of new capacity. The areas in question are Aomori South (600 MW), with an expected commercial operations date (COD) between June 2030 and April 2031; and Yamagata Yuza Town (450 MW), with an expected COD between June 2030 and April 2031. The application window for round 3 will be open from 19 January until 19 July 2024. Amori and Sakata ports are expected to be utilised for the projects. The ceiling price for the projects is a little lower than Round 2, JPY18/MWh (US$0.12), compared with JPY 19/MWh. The assumed earliest COD is June 2030.

“The opening of a new round signals the authorities’ commitment to developing the offshore wind sector and creating a steady stream of opportunities for the supply chain,” says Esgian Offshore Wind. “Several developers have already expressed an interest in the sites identified for Round 3, including RWE and CIP, in addition to domestic companies such as JERA and TEPCO.”

As Esgian Offshore Wind also explains, the Japanese government is also expected to award the Happo, Akita Prefecture, Oki, Noshiro City site by March 2024, which is a ‘leftover’ from the second allocation round. In addition, sites for floating demonstration projects will be awarded later in 2024, to test conditions for commercial-scale floating turbines in Japan. 

January 2024 saw another milestone in the development of the Japanese offshore wind sector when commercial operation of the Ishikari Bay New Port offshore windfarm was initiated. The offshore windfarm, developed by JERA and Green Power Investment (GPI), is Japan’s largest commercial-scale offshore windfarm and the first in the country to use 8-MW wind turbines. 

Built at Hokkaido’s Ishikari Bay New Port, the windfarm has 14 Siemens Gamesa wind turbines and a capacity of 112 MW. Onshore construction was carried out by Kajima Corp and offshore construction by a joint venture between Shimizu Corp and Nippon Steel Engineering. All the electricity generated at the windfarm will be supplied to the Hokkaido Electric Power Network (HEPN) after being transmitted through a transformer substation with 180,000 kWh of battery storage capacity, and then through HEPN’s Nishi Sapporo substation.

JERA and GPI say they are committed to further renewable energy projects in the region, and are working with Ishikari City, Otaru City and the authorities in the region.