Publication
Japan Offshore Wind (5th Edition)
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Publication
In 2022, Japan faced energy security issues due to a combination of an oil price surge, a weak yen, and power shortages caused by reduced transmission capacity after an earthquake and extreme weather. To address this, the Japanese government solidified the implementation of annual offshore wind auctions, incentivised earlier commercial operation of projects, and focused on creating resilient supply chains. Future policy discussions may include creating an auction process for offshore wind projects in the Exclusive Economic Zone (“EEZ”) which are likely to shape the offshore wind sector in the next coming decades.
In this report, we focus on the updates with respect to:
Round 2 Promotion Areas: which include the Happo, Enoshima Saikai, Murakami Tainai and Katagami Promotion Areas;
Promising areas: METI / MLIT designated the sea area off the coast of Kujukuri Town, Yamatake City and Yokoshibahikari Town, Chiba Prefecture as a new promising area for 2022. The Northern and Southern side of the Sea of Japan off the coast of Aomori Prefecture, and the sea area off the coast of Yuza Town, Yamagata Prefecture remain promising areas; and
Preparatory stage areas: METI / MLIT designated the sea area off the coast of Nyuzen Town and Asahi Town, Toyama Prefecture as a new preparatory stage area for 2022. There were no promotions from preparatory stage areas to promising areas in 2022.
Further announcements are expected in August / September 2023.
The results of the Round 1 Fixed Bottom Auction sparked intense debates across the industry and required METI and MLIT to consider revisions to the auction guidelines. The key changes in the auction guidelines are:
To explore the potential to support the development of offshore wind projects in the EEZ, the Cabinet Office launched an inter-ministerial task force involving Ministry of Foreign Affairs, Fisheries Agency, ANRE, MLIT and Ministry of Environment to discuss the issues associated with offshore wind projects in the EEZ. This task force published the EEZ Report, which focuses on legal issues related to offshore wind projects in the EEZ under the United Nations Convention on the Law of the Sea. The report recommends that Japan can carry out surveys and activities related to offshore wind projects, establish safety zones, and comply with environmental impact assessment requirements while respecting the rights of other states.
In April 2022, Japan expanded its Non-Firm Connection to all core grid systems, approving grid connections based on this new system. To promote renewable power sources, the government introduced a two-phase Re-dispatching Rule. The first phase began in December 2022 where the power sources reserved for stabilising the transmission systems will be utilised first to resolve the congestion in the relevant grid system. The second phase will launch by December 2023, expanding the rule to all thermal and non-thermal power sources. This rule aims to reduce curtailment risks for renewables by prioritising thermal power curtailment. Additionally, METI published guidelines for information disclosure to help power generators analyse risk profiles.
If you would like to find out more about how we can help you with your renewables projects across Asia, please get in touch with a member of the team.
Energy & Infrastructure Partner, Tokyo
Japan
Partner, Tokyo
Japan
Energy & Infrastructure Partner, Singapore
Singapore
Managing Partner, Seoul
Energy and Infrastructure Counsel, Tokyo
Japan
Partner, Singapore
Singapore
Partner, Co-Head of Asia Energy & Infrastructure, Hong Kong SAR