JAPAN Law and Practice Contributed by: Rintaro Hirano, Yutaro Fujimoto, Yurika Masakane and Yutaro Kato, Nagashima Ohno & Tsunematsu
able energy generators need to manage their imbalance risks. Under the FIT Regime and FIP Regime, the intro- duction of renewable power generation facili- ties has been significantly growing and many new companies have entered the renewable energy market. However, since power genera- tion facilities have a significant impact on the local community and environment where they are installed, there have been growing concerns in local communities regarding safety, and the potential impact on the landscape and environ- ment. To promote the introduction of renewable power generation facilities in a sustainable man- ner, harmonisation between renewable energy projects and the local community is important. As such, in May 2023, the Diet passed a Bill to amend the Renewable Energy Special Measures Act (the “2024 Amendment of Renewable Energy Special Measures Act”), which came into force on 1 April 2024. Under the 2024 Amendment of Renewable Energy Special Measures Act, renewable energy project operators are required to hold briefing sessions with local communi- ties in compliance with detailed requirements if such operators obtain initial approval under the FIT Regime or FIP Regime (ie, before they com- mence operating their renewable energy facili- ties) or if they change the ownership structure of the project in any material respect. Change to Bidding Rules Under the Offshore Wind Promotion Act In order to promote offshore wind electricity gen- eration in Japan in the general sea area (rather than the port and harbour areas), the Diet passed the Act for the Promotion of Use of Marine Areas for Development of Marine Renewable Energy Generation Facilities (Act No 89 of 2018, as amended – the “Offshore Wind Promotion Act”).
However, the result of public bidding for the first batch (consisting of three project sea areas) of offshore wind electricity generation concessions under the Offshore Wind Promotion Act shocked the industry because consortiums represented by the same company won all three project sea areas. The government, believing that offshore wind farm projects must be open to more play- ers in order for the industry to grow in the long term, introduced new rules under which a single bidder could only win offshore wind farm con- cessions up to 1 GW of power. Under the public bidding of the second batch (consisting of four project sea areas) and the third batch (consisting of two project sea areas) which were conducted under the new rules, those project sea areas were respectively awarded to different consorti- ums for each batch. In order to promote offshore wind power genera- tion further, the government submitted a Bill to the Diet in March 2025 to expand the promoted areas to include the entire Exclusive Economic Zone (EEZ) under the Offshore Wind Promotion Act. The construction of offshore wind farms usually requires large investment over a long period, and thus the construction is susceptible to price fluc- tuation risks such as rising labour costs, infla- tion, interest rate hikes, and exchange rate fluc- tuations. As such, the government is discussing revisions to the bidding rules to enhance the reliability and feasibility of offshore wind pro- jects, not only for future bid projects but also for the existing bid projects from the first to the third batches. Specifically, it is expected that the amount in deposits required from bidders will be increased and that part of the deposits will be forfeited in the event of a delay in the commencement of commercial operations. In addition, potential adjustment of the bid price
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