Shulman Advisory

Japan’s Offshore Wind Auctions Aim for Earlier Start Dates and Greater Financial Stability

Publication date: Oct 28, 2024   Research Projects Accelerated Switch to PPA Business Model in PV Market 

Japan’s Offshore Wind Auctions Aim for Earlier Start Dates and Greater Financial Stability

The Ministry of Economy, Trade and Industry (METI) proposed revising the evaluation method used when selecting operators for offshore wind power projects in designated marine areas. One of the evaluation criteria is the lead time to the start of operations, for which 20 points are allocated out of a total of 240 points. In the revised proposal, if the development period matches the standard of six years, 18 points will be awarded, while shortening it to five years and six months will earn a full 20 points. Conversely, if the period extends beyond the standard by six months, two points will be deducted for each half-year delay. The new standard of six years was set based on the average planned development period that all participating companies proposed during the second auction for offshore wind power projects, in which the selected operators were announced at the end of last year.

Enhanced Scoring for Financial Viability in Offshore Wind Projects

In addition to speediness criteria, the “Top Runner” projects with particularly excellent financial and income/expense plansfor the risk scenarios indicated in the Guidelines for Public Tender of Exclusive Occupancy will have their scores increased from the current 10 points to 14 points. This increase is related to the fact that offshore wind power projects often require large investments of several hundred billion yen and a long project implementation period of approximately 40 years. During this time, it is necessary to prepare for possible increases in development costs due to inflation and exchange rate fluctuations.

These changes in the criteria will take effect from the Round 4 auction. The government has completed the solicitation of developers for Round 3, and the results will be made public in the near future.

Japan’s Offshore Wind Auctions Aim for Earlier Start Dates and Greater Financial Stability
Japan’s METI is revising offshore wind evaluations to prioritize faster start dates and financial stability. New criteria will award points for development timelines and increase scores for “Top Runner” projects. Changes take effect in Round 4 auctions.

Japan’s Offshore Wind Auctions Aim for Earlier Start Dates and Greater Financial Stability

________________________________________________________________________________________

TOCOM’s Power Futures Trading Volume Jumps Sharply in Q2, Lags EEX

0 replies on “Japan’s Offshore Wind Auctions Aim for Earlier Start Dates and Greater Financial Stability”