Publication date: Dec 1, 2025
Japan Revises Offshore Wind Auction Rules Ahead of First Round Re-Auction
The Ministry of Economy, Trade and Industry (METI) and the Ministry of Land, Infrastructure, Transport and Tourism (MLIT) jointly held an expert meeting to review the offshore wind (OSW) auction system and presented a new set of proposed evaluation criteria for the re-auction of the OSW projects from which Mitsubishi Corporation withdrew earlier this year.
For the re-auction, the government will introduce a price floor to prevent bidders offering unrealistically low prices. The scoring gap between the price floor and ceiling will be set at 20 points to avoid extreme differences in price scores. In the first auction round, the Mitsubishi-led consortium bid significantly lower than competitors and received a full score on price, but later saw the project to be unprofitable due to global inflation, leading to its withdrawal. The revised system will also allocate more points to factors related to project stability, such as detailed planning and domestic procurement, rather than simply rewarding speed of implementation. The government will coordinate with experts and finalize the revisions within the year. Based on the new evaluation criteria, the three offshore areas off Akita and Chiba prefectures, from which Mitsubishi withdrew, will be re-auctioned as early as 2026.
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Revisions for Second and Third Auction Rounds
METI also presented proposed revisions to the rules for the second and third rounds of OSW auctions. Although selected developers, such as Mitsui, bid under conditions that excluded additional government subsidies, the government now plans to allow them to participate in the Long-Term Decarbonization Power Source Auction (LTDA), which guarantees fixed revenues for 20 years, in order to support project continuation. Regarding the price adjustment scheme, OSW developers requested that inflation from the time of bidding to the present be reflected; however, for the mechanism that allows power prices to reflect increases in material costs, the scope will permit adjustments only for future increases.
Shulman’s commentary: A recent study by Yano Research Institute, a market research firm, predicts that the domestic wind power market will reach JPY 293.5 billion in FY2025, and then more than quadruple to JPY 1.28 trillion in FY2040. This forecast assumes steady progress in commissioning large-scale wind projects, including the OSW projects to be re-auctioned next year. The ongoing revision process is crucial to preventing further delays in implementing the OSW projects if the government wants to achieve its wind power target of 4-8% of the energy mix by 2040.