Toward Steady Implementation of Offshore Wind Power as a Main Power Source in Japan

On August 27, 2025, it was announced that developers had decided to halt development in the three areas of the first round (two designated areas in Akita Prefecture and one at the coast of Choshi, in Chiba Prefecture).

The government responded swiftly, holding statutory consultation meetings in Akita and Chiba on September 4 and 8, respectively. Subsequently, on September 11, it convened a joint meeting of the Offshore Wind Power Promotion Working Group and the Offshore Wind Power Promotion Subcommittee (hereinafter referred to as the “Joint Meeting”). At this meeting, the government outlined its policy to promptly advance the re-tender process for the three Round 1 areas, while also working to finalize further improvements to the business environment, including a review of the offshore wind auction system by the end of this year. These initiatives demonstrate the Japanese government's proactive stance in swiftly reflecting local voices and continuing to steadily promote the introduction of offshore wind power generation. We, JWPA, find this approach highly encouraging.

However, it has become clear that the price-weighted bidding in the first round, coupled with drastic changes in the external environment such as inflation and yen depreciation, has resulted in project withdrawals and risks causing market stagnation. While the offshore projects within port areas such as Akita Port, Noshiro Port, and Ishikari Bay New Port have already commenced operations, we believe it is crucial to recognize that the offshore project at the general sea area remains in its nascent stage.

In light of this situation, we propose the following recommendations to the government to ensure that selected developers in the second and third rounds can reliably complete their investments in the respective projects, and to secure the predictability, transparency, and stability of the system necessary to attract domestic and international investment in future offshore wind auctions:

•  Accelerate further improvements to the business environment to ensure the successful completion of  investments related to offshore wind power

We greatly appreciate that the auction system guidelines for sea area occupancy are being revised to allow for the renewal of occupancy permits as a general rule, addressing the extension of sea area occupancy periods proposed by us at the Joint Meeting. We also request further consideration to apply the following proposals to Round 2 and Round 3 projects: allowing participation in long-term decarbonization power source auctions and other capacity markets, providing support for securing off-takers, and promoting government-led development and rationalization of port and other infrastructure facilities.

•  Early Clarification of Future Auction Schedules

Due to the impact of the Round 1 re-tendering, the future schedule for auction as well as bidding process, including Round 4, remains unclear, making it difficult for potential developers to prepare their bidding and make decisions. The re-tendering, in particular, was an unforeseen circumstance. Preparing bids requires considerable time for consortium formation and document preparation, so we request that the public offering and bidding schedules be clarified as soon as possible.

•  Reformation of the Auction System

We believe it is essential to reform the auction system to accurately evaluate projects, incorporating coordination with local communities. This should involve appropriately assessing the feasibility of projects and the execution capabilities of operators in advance, referencing examples in leading European countries, and setting price levels that enable developers to complete their investments in the projects.

Furthermore, we, as an industry, are committed to promoting the following initiatives, based on the “Vision for Offshore Wind Power Industry(Second Edition)” announced by the government on August 8, 2025;

• To achieve a domestic procurement ratio of 65% or higher by 2040
• To promptly review the cost target for fixed-bottom offshore wind power generation
• To strengthen the supply chain and secure/develop human resources to achieve the 2040 target
• To make continuous efforts to reduce costs to achieve the above targets

Despite challenging circumstances, it is our firm belief that offshore wind power holds the potential to contribute significantly to Japan's energy security, decarbonization, trade balance improvement, and the development of domestic and local economies, including job creation.

We, JWPA, are committed to steadily implementing the mainstreaming of offshore wind power through unified efforts by and among the government, local communities, academia, and industry.