GWEC Urges Japan to Reform Offshore Wind Auctions and Boost Public-Private Collaboration for Clean Energy Growth

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Japan must urgently reform its offshore wind auction framework and establish a public-private forum to accelerate its clean energy transition, according to a new white paper released by the Global Wind Energy Council (GWEC) in collaboration with renewable energy consultancy OWC.

The report, titled “Unlocking Japan’s Offshore Wind Potential: Strategic Pathways to Overcome Market Bottlenecks and Drive Industrial Growth,” outlines comprehensive strategies for Japan to ensure project viability, attract investor confidence, and regain momentum in its offshore wind sector.

Current Market Challenges

Japan has completed three rounds of offshore wind auctions to date. However, the country’s early projects have encountered significant obstacles — with the sole bidder from Round 1 withdrawing and winners from Rounds 2 and 3 facing severe financial strain.
These challenges have underscored the need for a restructured auction design that incorporates industry feedback and aligns with global market developments.

Without urgent reform, the report warns, Japan risks delays in meeting its decarbonisation and energy security goals, jeopardising potential job creation and broader economic benefits linked to the offshore wind industry.

Industry Perspectives

Takeshi Matsuki, Japan Country Manager at GWEC, emphasized the urgency of reform:

“Japan holds vast offshore wind potential and cannot afford to miss its chance to become a regional leader. Auction reforms, reassessment of offtake mechanisms, and the removal of critical bottlenecks are key to restoring growth. Offshore wind must remain the backbone of Japan’s power mix on its path to carbon neutrality by 2050.”

He added that once reforms are implemented, offshore wind could deliver clean, affordable, and locally sourced energy, while also revitalising regional economies and coastal communities.

Masataka Nakagawa, Country Manager for Japan at OWC, echoed the sentiment, noting that Japan stands at a pivotal moment in its clean energy transition.

“While initial tenders laid the foundation, recent developments highlight the need for structural and institutional reform. Timely auction redesign, improved offtake schemes, and enhanced transparency in certification and supply chains are essential to strengthen investor confidence and project delivery,” Nakagawa stated.

Key Recommendations

The GWEC white paper presents both short-term and long-term measures across three main areas:

-Auction Framework

-Offtake Mechanisms

-Market Bottlenecks

Short-term actions include re-tendering the withdrawn Round 1 project and refining evaluation criteria in upcoming auctions.

Long-term recommendations involve adopting a two-stage auction structure and enhancing the centralised development model to ensure greater certainty and sustainable market growth.

On offtake mechanisms, the report calls for a review of existing price caps and a transition from the Feed-in Premium (FIP) to more bankable options such as two-sided Contracts for Difference (CfD) or Feed-in Tariffs (FIT). Expanding access to Corporate Power Purchase Agreements (CPPAs) is also advised to mitigate developer risk.

Addressing market bottlenecks, GWEC suggests improving transparency in certification processes, adopting risk-based assessments, setting Commercial Operation Date (COD)-based targets, and introducing compensation mechanisms to minimise curtailment and boost project bankability.

Government Response and Next Steps

GWEC and OWC, along with other working group members, presented their 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.
These agencies have shown strong interest in the recommendations outlined in the white paper.

As a follow-up, GWEC plans to establish a bridging forum — a public-private platform designed to facilitate continuous dialogue between industry stakeholders and government bodies.

This forum aims to create a transparent, predictable, and investor-friendly policy environment that will accelerate Japan’s offshore wind expansion, strengthen its energy security, and drive long-term economic growth.