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Climate Change

Japan to increase competition in offshore wind to speed rollout

Tokyo sees power source as essential to hitting net-zero emissions by 2050

A floating wind turbine sits off the coast of Chiba Prefecture near Tokyo. (Photo by Mamoru Tsuge)

TOKYO -- Japan wants to bring new offshore wind farms online faster, releasing draft rules on Thursday that encourage wider competition for construction and limit the ability of a single bidder to win multiple projects in one fell swoop.

The planned changes to the bid process come after a consortium led by a Mitsubishi Corp. subsidiary landed contracts in December for all three areas off the coasts of Akita and Chiba prefectures in the government's first major bidding for wind projects.

The Mitsubishi consortium offered much cheaper power than its rivals, but the outcome underscored how pricing overshadowed other aspects of a bid such as shorter time frames for implementation.

Critics called for an updated approach that attracts more contractors to speed the development of offshore wind farms. A government panel has discussed changes to the bid process since March.

Japan's government aims to make renewable energy a major power source to help reach its goal of net-zero greenhouse gas emissions by 2050. Early installation of wind energy is regarded as crucial. But balancing low costs with widespread participation poses a challenge.

Bidders currently are judged on a 240-point scale that awards credit for pricing and operational feasibility. Those receiving the highest score are chosen for the project.

The proposed rules would apply to contracts that cover multiple offshore sites, limiting a single consortium to bidding for up to 1,000 megawatts of capacity. A bidder would be awarded territory for which it scores the most points. Once that cap is reached, its bids for other sites will be invalidated. This approach will be applied to the next call for proposals, though the use and scope of the caps will be determined individually for each project.

The current system grants up to 20 points based on the feasibility of a bidder's plan for a project. But the new rules are expected to award as many as 20 points for how quickly the plan can be executed. The two Japanese ministries issuing the rules -- the infrastructure ministry and the Ministry of Economy, Trade and Industry -- intend to place more weight on the speed in which a wind project gets off the ground.

Pricing will still account for 120 points, but both ministries will disclose in advance the price for which an operator can receive all 120 points. Even if a bidder undercuts that price, no more than 120 points will be granted.

During Thursday's hearing by the two ministries, some panel members objected to the new rules. The committee will make modifications, then take public comment. The goal is to finalize the rules by the end of the year.

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