METI and MLIT Propose Overhaul of Offshore Wind Auction Scheme, Shifting Focus to Project Execution and Supply Chain Stability
November 21, 2025
Japan’s Ministry of Economy, Trade and Industry (METI) and Ministry of Land, Infrastructure, Transport and Tourism (MLIT) have presented a proposal to revise support measures and the public auction system for offshore wind projects under the Act on Promotion of Utilization of Sea Areas for Renewable Energy. The proposal was outlined at a joint expert meeting on November 19.
In response to recent project withdrawals in the first round (Round 1), the ministries plan to expand support for Round 2 and Round 3 projects and introduce major changes to the auction evaluation system. The revised framework places less emphasis on lowest-cost bidding and speed, and instead prioritizes project feasibility, grid reliability, and domestic supply chain development.
Exception Granted to Let Offshore Wind Enter the Long-Term Decarbonization Power Source Auction
One key proposal is to allow offshore wind projects in Round 2 and Round 3—and only these rounds—to participate in Japan’s Long-Term Decarbonization Power Source Auction. This auction compensates developers for construction and maintenance costs. Under the current FIT/FIP system, participation is generally prohibited, but offshore wind’s early-stage status justifies an exception, the ministries said.
Meanwhile, the government noted that applying post-bid inflation adjustments to already selected projects would distort competition, and therefore is not feasible.
Greater Flexibility for Project Modifications
For both Round 2 and Round 3, changes in design, construction methods, or turbine suppliers may become necessary as market conditions evolve. METI and MLIT propose allowing flexible revisions to approved occupancy plans if changes are deemed essential for project continuation. Expert review will be required to approve such modifications.
MLIT is also studying mechanisms to permit more flexible use of base ports for offshore wind logistics.
Auction Scoring Reform: Higher Weight on Execution and Supply Chain
The revamped evaluation system would rebalance scoring as follows:
-
Speed of project delivery: lowered from 20 → 10 points
-
Project execution plan: raised from 20 → 25 points
-
Power system stability & supply chain formation: raised from 20 → 25 points
Developers with credible, deliverable plans will be scored higher than those focused solely on cost reductions.
Additional proposed measures include:
-
adopting cumulative scoring
-
setting a two-year grace period for commercial operation
-
applying relative evaluation based on construction period
-
introducing floor and ceiling bid prices, with disqualification for bids below the minimum
Regarding eligibility penalties, for Rounds 1–3, the ministries propose limiting suspension to already-selected developers, while considering future rules that may also suspend parent or subsidiary companies.
Both ministries emphasized that the aim of the reform is to secure project completion, strengthen the industrial foundation, and support cost reductions to ensure stable and sustainable offshore wind deployment in Japan.
