Renewable energy public auctions in Japan: Context, style and outcomes

Jan 26, 2021 10:09 AM ET
  • Japan has long been a significant energy importer, relying greatly on fossil fuels to satisfy family and also community electrical power needs in addition to transport and industrial power need. Although the country originally opted for nuclear plants to diversify its power mix, the disaster at Fukushima in 2011 triggered a fundamental shift in Japanese energy policy.

With nuclear power progressively omitted from the future energy mix, renewable resource technologies have become a main element in Japanese power and also power planning. Auctions, at the same time, have actually emerged as the essential plan instrument driving the nationwide change to renewables.

This report by the International Renewable Energy Agency (IRENA) lays out the country's experience with auctions for solar, wind as well as biomass power generation. Japan's renewable energy public auctions are price-centred as well as often tend to prioritise simple design elements.

Among the searchings for:

  • By late 2020, Japan had actually performed five solar photovoltaic (PV) and 2 biomass public auctions. It also launched a zone-specific offshore wind auction in June 2020. A feed in costs (FiP) plan revealed in 2020 to advertise renewable energy usage was readied to be introduced in 2022.
  • To day, bidders have been awarded virtually one-third of the originally introduced volumes from the 5 solar PV public auctions, with 574 megawatts (MW) granted out of the total amount 1 663 MW auctioned. No biomass project has yet been acquired through renewable resource auctions.
  • Average granted prices in the solar PV auctions fell by more than 35% between the very first and also 5th rounds. Yet solar PV rates in Japan are still greater than the international average.
  • Solar PV prices in Japan are likewise high contrasted to those accomplished in other countries with comparable macro-economic conditions as well as degrees of solar power development.
  • Reasonably high rate results do not necessarily taint an auction's success. The typical granted prices were close to the existing expenses of electricity for solar PV power in Japan, underscoring the price discovery element of the public auction procedure.
  • The major factor behind Japan's high solar power rates is its reasonably high installment and also structure prices, in addition to the price of modules and also inverters. Danger understandings as the market checks out new power sources can also raise rates.

Downlod report: