Publication date: Aug 2, 2025 Higher Demand for PPAs Drives Growth in Private Auction Participation
Higher Demand for PPAs Drives Growth in Private Auction Participation
Increasing demand for power purchase agreements (PPAs) is prompting more companies to participate in private auctions in Japan. In May-June, DIGITAL GRID held its fifth auction on the matching platform “RE Bridge,” which focuses on off-site PPAs, and matched significantly more capacity at slightly lower strike prices than previously. The company held its first auction in October 2023 and has since conducted corporate PPA matching between generators and buyers every quarter.
A total of 59 buyers and 98 generators participated in the fifth auction, involving 431 power plants with a combined capacity of 2,126 MW. A total of 31 matches were made, covering a capacity of 107 MW. The average desired PPA ask price of matched generators was JPY 18.1 kWh, while the buyers’ average bid price was JPY 17.8 kWh.
In the previous fourth auction, there were only 15 matches with a total capacity of 37 MW. The average desired PPA ask price from producers was JPY 19.0 kWh, with the buyers’ average bid price also at JPY 19.0 kWh.
Regulatory Shift and Market Response
According to DIGITAL GRID, the sharp increase in the number of generators and power plants in the fifth round is mainly due to a regulatory revision enacted in April 2025, which allowed existing Feed-in-Tariff (FIT) projects that began operation before April 2022 to transition to the Feed-in-Premium (FIP) scheme and participate in virtual PPAs.
In terms of installed capacity, the increase was driven not only by already-operational solar power projects but also by new registrations of large-scale wind and biomass projects. The breakdown was approximately three-quarters solar and one-quarter wind and biomass. The increase in buyers is attributed to more companies beginning to seriously consider PPA procurement in anticipation of their 2030 targets, as well as rising agreement rates for FIT Non-Fossil Certificates (NFCs).
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The increasing demand to secure a long-term energy supply through PPAs is motivating more companies to use the private trading platform. Renewable energy-related PPAs will continue to increase as more and more FIT projects are expected to be converted into FIP in line with the Japanese government’s plan.
Shulman Advisory has extensive experience advising clients in Japanese energy markets, including entry advice to the growing Japanese PPA market. If you are interested in learning more about our services, please contact us at info@shulman-advisory.com.