Japan Urged to Reform Offshore Wind Auction System to Regain Clean Energy Momentum

Japan must urgently reform its offshore wind auction system and establish a public-private forum to steer policy and investment if it is to restore momentum in its clean energy transition, a new industry report said on Monday. The white paper, Unlocking Japan’s Offshore Wind Potential: Strategic Pathways to Overcome Market Bottlenecks and Drive Industrial Growth, was released by the Global Wind Energy Council (GWEC) and renewable energy consultancy OWC. It warned that without changes to the current auction framework, Japan risks delays in achieving its decarbonisation and energy security targets. Japan has held three rounds of offshore wind auctions so far. However, the sole Round 1 bidder has withdrawn, while the winners of Rounds 2 and 3 are facing significant financial pressure. GWEC said these setbacks underscore the need for “timely reform and a more effective auction design” that reflects current market conditions. “Japan holds vast offshore wind potential and cannot afford to miss its chance to become an offshore wind leader, especially within the Asia-Pacific region,” said Takeshi Matsuki, GWEC’s Japan country manager. “To put the industry back on a growth trajectory, Japan must pursue auction reforms, reassess offtake mechanisms, and remove critical market bottlenecks.” Matsuki added that tapping this potential could deliver “clean, affordable, and locally produced renewable energy,” while supporting regional economies through job creation and coastal development. OWC’s Japan country manager Masataka Nakagawa said offshore wind remains central to Japan’s clean energy ambitions but requires institutional and policy changes to ensure investor confidence. “Japan stands at a pivotal moment in its clean energy transition, and offshore wind has emerged as a central pillar of its strategy,” Nakagawa said. “Timely auction reform, including evaluation criteria optimisation, will be key to accelerating capacity build-out.” He added that improving offtake mechanisms such as price caps and moving toward more bankable models — including two-sided Contracts for Difference or Feed-in Tariffs — could better align projects with market conditions and enhance investment stability. The report outlines both short- and long-term recommendations focusing on three main areas: auction reform, offtake mechanisms, and the removal of market bottlenecks. Short-term measures include retendering Japan’s Round 1 site and revising evaluation criteria to balance price and non-price factors. Longer-term reforms propose a two-stage auction model and Commercial Operation Date-based targets to support delivery and domestic manufacturing. GWEC and OWC presented the findings to Japan’s Ministry of Economy, Trade and Industry (METI), Ministry of Land, Infrastructure, Transport and Tourism (MLIT), and Ministry of Environment (MOE) in late October. The ministries expressed strong interest in the report’s recommendations, according to the organisations. GWEC said it plans to establish a bridging forum between government and industry to promote transparent dialogue and support the development of a predictable policy framework for Japan’s offshore wind sector.

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