Japan government announces 2nd round Off-shore wind auction results: RWE-backed consortium wins concession in Niigata

METI/MLIT announced the results of the 2nd round of auctions for OWP concessions at three sites in Niigata, Akita and Nagasaki. A consortium consisting of trading house Mitsui & Co, RWE Offshore Wind Japan, the Japan-unit of RWE of Germany and Osaka Gas won the concession for the site on the coast of Murakami City and Tainai City. EU involvement is also present in the two other concessions given. Vestas will provide 21 15MW-class turbines for the concession  for the site in Akita Prefecture (Oga City, Katagami and Akita City) and the 28 15MW class turbines for an OWP in Nagasaki Prefecture.

The result for the auction of the concession for the Akita Happou Town/Noshiro City Coast site the government is planning the bidder with the highest evaluation to resubmit the publicly solicited occupancy plan due to the overlapping use of the port area (The consortium winning the Katagami concession is already claiming the port area). After evaluation by the external committee a result is expected to be announced in March 2024.

Based upon the results of the auctions, the winning operators have stated they supply for ¥3 per KWh or lower, receiving full scores in terms of price evaluation. This is much lower than the current whole sale price for electricity and has come as a shock to the industry. The development of offshore wind power may be led by large, well-capitalized companies in order to promote the spread of offshore wind power, concludes Nikkei Online. In the previous round the price Mitsubishi set at between ¥12-16.5 was regarded as a shock. Now with the new FIP introduce even lower prices are seen as profitable.

The major trading companies that won the bidding said that they are bidding because they are confident that they can secure profits, while some of the companies that lost out said that they may hesitate to bid for the project in the future. As the overall strength of companies is being questioned, the number of companies bidding for the third round, which will begin at the beginning of the new year, may be narrowed down.