Recommendations on Accelerating the Offshore Wind Power in JapanTo Create a Fair and Transparent Competitive Environment

in Japanese

Renewable Energy Institute released "Recommendations on Accelerating the Offshore Wind Power in Japan: To Create a Fair and Transparent Competitive Environment" (originally published in Japanese on 15 June 2022).

Now that many countries in the world have been turning towards a new era of economy with massive deployment of renewables, offshore wind power is the energy technology currently drawing the most attention.

In Japan too, the introduction of offshore wind has begun and in 2021 developers were chosen for large-scale projects totaling 1.67 GW.
At the same time, however, following the need for improvements in the current tendering system raised by various stakeholders, the government moved up to extend the Round 2 public tender deadline and is now reforming the system.

For Japan, which must build its offshore wind industry from the ground up, to harness the momentum of this global market expansion, it needs to quickly establish the market conditions that allow for diverse players, both overseas and domestic, to be actively involved.

This recommendation paper summarizes the measures needed to ensure fair competition and create a stable, transparent business environment, focusing primarily on issues related to the zone designation system and project developer selection system. The recommendations stem from discussions with offshore wind power developers in various positions.

List of Recommendations

I.    State-led offshore wind development—introduction of an internationally comparable “centralized system” 

(1)    The national government should lead and implement grid security, local coordination, and primary site investigations and clarify when these activities are to be implemented

(2)    Preliminary site investigations (wind conditions, meteorological and hydrographic conditions, seabed condition, environmental impact, fisheries)

・   Start preliminary site investigations by the national government as early as possible in all sea areas where the surveys have been agreed upon,
・   Ensure that the data from preliminary site investigations are of the quality that project developers can use for planning purposes without the need to collect additional information,
・   Data from preliminary site investigations should be made publicly available and shared free of charge,
・   Clarify that the preliminary site investigation by the national government will be implemented from fiscal 2023 (from April 2023),
・   Introduce a system to compensate survey costs to project developers under certain conditions, such as providing survey results to the state if developers have conducted site investigations in the designated sea areas ahead of others.

(3)    Promote efficient and reliable grid formation under the state leadership

・   Immediately start using the national grid securing scheme, 
・   Early grid development by the general electricity transmission and distribution utilities should be positioned as an evaluation item in the revenue-cap system,
・    Establish hub substations and switching stations near the landing point as part of push-based grid reinforcement,
・    Allow for efficiency improvements in grid planning taken over by the selected project developer,
・   Establish a system for transferring long-distance onshore transmission lines constructed by power generators to general transmission and distribution companies.

(4)    Start discussions and research studies on coexistence with local communities and fisheries at an early stage

・   The national government should identify issues related to coexistence with local communities and fisheries, and promptly initiate discussions to clarify the roles of the national and local governments,
・   Establish guidelines and guidance on how developers, fishery operators, the national government, and local governments can work together and solve problems,
・   Include offshore wind farm sites in the areas eligible for the Power Supply Location Measures Grant,
・   The government should immediately launch a basic fishery survey, accumulate and publish the data.

(5)    Further strengthen state initiatives

・   Expand the role of the state to include infrastructure development and coordination of use (grids, ports),
・   Unify contact points for procedures across many ministries and agencies and strengthen the system,
・   Enhance the provision of accurate information on offshore wind power.

II.    Creation of environment enabling fair competition and stable projects—improvement of procedures for selecting developers

(1)    The national government should conduct preliminary site investigations sufficient for the planning of project developers and make the data publicly available, 

(2)    The details of the evaluation results should be made public,

(3)    In public tenders from Round 2 onwards, the state should specify the start-up date of operations,

(4)    A pre-qualification (PQ) system should be introduced in the new system (the “Japanese Centralized System”).


III.    Necessity of roadmap formulation

(1)    Establish a new ambitious 2030 target, such as commencing operations for 10 GW by 2030, and a roadmap that clearly defines when projects should start operating,

(2)    Continue dialogue and cooperation between the state and industry through the Public-Private Council and establish a concrete promotion system up to 2030.