Renewable Energy Institute (REI) released the following comment regarding the arrest of a member of the Diet in connection with offshore wind power development.
On September 7, Masatoshi Akimoto, a member of the House of Representatives, was arrested on suspicion of accepting bribes in connection with offshore wind power projects. The background of this matter and the extent of legal responsibility will be clarified through investigations and judicial proceedings. However, the situation where the person who was the secretary general of the ruling Liberal Democratic Party's Parliamentary Association for Promotion of Renewable Energies formed a racehorse owners' group with the president of a wind power generation company and received large amounts of funding from the company should not be overlooked from the point of view of common sense among ordinary citizens, regardless of whether or not he is legally responsible.
One of the origins that triggered this case is reported to be in an incident where in the bidding announced in December 2021 for offshore wind power projects, a consortium of companies led by a major trading house won in all three promotion zones and the company that is alleged to be on the bribery side was among those losing the bid.
The bidding at this time was Japan's first full-fledged competitive bidding for offshore wind power development. After the bidding, a variety of opinions were expressed regarding the system, pointing out the need for improvements. In November 2022, the national government announced “Guidelines for Public Tender of Exclusive Occupancy (draft)”' and revised the system. Offshore wind power holds the key to the future expansion of renewable energies in Japan. Based on the basic understanding that a transparent and fair competitive environment is essential for the steady introduction of offshore wind power and cost reduction, the REI has made various proposals.
The reason why the consortium of companies led by a major trading house won in all of the zones was because they bid at prices (11.99 yen to 16.49 yen/kWh) that were significantly lower than the upper limit price (29 yen/kWh). The industry had traditionally set a price target for offshore wind power of 8 to 9 yen/kWh by the 2030s. REI highly valued the fact that this bid brought us closer to achieving the stated price target, and invited a representative of the company that led this business alliance as a panelist at REvision2022, a symposium held three months after the bidding to discuss various issues including: “How did the low price bidding become possible?” and “What the future direction of offshore wind development should be like?”
Regarding the national government's move to review the bidding system, we have pointed out that suspending bidding process already in progress to review the system would impair market predictability and significantly reduce investment appetite. With regard to the new draft “Guidelines for Public Tender of Exclusive Occupancy”, we raised the issue of complicating evaluations. We also criticized the introduction of restrictions on the total capacity of successful bids from the same developer, saying, “The restrictions should be abolished for both the purposes of forming a large market in order to advance cost reductions and attracting investment from around the world.”
What is of concern about this alleged bribery case is the impact it might have on the offshore wind power development. Japan's offshore wind power development lags far behind Europe, the United States, China, South Korea, and Taiwan. In order to accelerate development, it is necessary to promote the development of floating offshore wind power at full scale, in addition to the bottom-fixed type that has been progressing to date. This case came just after the national government began efforts to promote development by holding a meeting of “the panel on the floating offshore wind industry strategy aimed at strengthening the industrial competitiveness of offshore wind power” in July.
Renewable Energy Institute will continue to collaborate with many domestic and international companies, national governments, and local governments that are sincerely working on offshore wind power development, working to realize a transparent and fair competitive environment and expand the introduction of wind power.