Publication date: Sept 12, 2025
OCCTO Proposes New Rules for Upcoming Long Term Decarbonization Auction
At an expert meeting on the capacity market, the Organization for Cross Regional Coordination of Transmission Operators (OCCTO) reported the results of a public consultation on draft guidelines for the third Long-Term Decarbonization Power Source Auction (#LTDA).
In the meeting, the secretariat proposed new rules concerning non-lithium-ion Battery Energy Storage System (#BESS) types. Currently, the proportion of lithium-ion BESS capacity manufactured by any individual country (apart from Japan) must remain below 30%. The secretariat proposed extending this same capacity limit to non-lithium-ion BESS installations.
Guideline Adjustments and Implementation Timeline
The secretariat also proposed that OPEX for hydrogen, ammonia, and CCS will be indexed annually to the consumer price index (CPI), while #CAPEX will be adjusted only once, reflecting CPI changes between the bidding date and the scheme’s commencement. Additionally, to mitigate moral hazard, operators are required to cover 10% of any cost increases. However, additional expenses arising from extended program durations—such as operation, maintenance, or refurbishment—are not subject to this rule.
Going forward, OCCTO will publish the revised guidelines and terms in September, reflecting these changes, and will also hold a briefing session in the same month to explain the system details. The registration process for the third LTDA will begin in October 2025, with bid submissions scheduled to commence in January 2026. OCCTO Proposes New Rules for Upcoming Long Term Decarbonization Auction
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The stricter origin requirements for BESS equipment proposed by OCCTO come as no surprise, as BESSs made outside Japan are a common sight, prompting concerns over import dependence. The new policy will likely lessen dependency on specific countries and promote BESS production in Japan in the long term.
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