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(Bloomberg) — Japan’s offshore wind auctions should include broader feedback and a better pricing criteria, according to an industry group, following setbacks that have dented the country’s plans to decarbonize.
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The auction process needs to include industry participants who have “hands-on experience from the front lines of offshore wind development,” the Global Wind Energy Council recommended in a white paper published on Monday. Currently, reviews are discussed within a panel at the nation’s trade ministry, mainly among committee members from academia, the group said.
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Japan’s offshore wind industry was dealt a blow recently after a group led by Mitsubishi Corp. withdrew from three projects, citing higher construction costs that could rise even further. The industry is facing cost pressures globally, and some nations are backing away from green policies — most notably the US.
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GWEC recommended changes to the pricing criteria for Japanese auctions so that excessive competition and unrealistic bidding can be prevented. Upper limits to price on a project should be raised above typical profit levels, while the lower limit should be closer to the break-even point, the paper said.
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The industry group also proposed that the government improve its centralized auction model, including requiring the state-backed Japan Organization for Metals and Energy Security conduct better site surveys that would minimize uncertainties for developers looking to bid on offshore projects.
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Japan had sought to jumpstart its offshore sector in a bid to meet it goal of boosting renewables to as much as 40% by fiscal 2040, with wind comprising 4-8% of its electricity mix.
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