February 2023

Trends in Offshore Wind Power Generation inJapan
1. Resumption of Offshore Wind Power Auctions
On 28 December 2022, the Ministry of Economy, Trade and Industry (METI) and the Ministry of Land,
Infrastructure, Transport and Tourism (MLIT) opened the second round of auction bids under the Marine
Renewable Energy Facilities Act1. This round invites bids for the operation of large-scale offshore wind
power projects in four sea areas around the coast of Japan (Happo-Noshiro in Akita, Oga-Katagami-Akita
city in Akita, Murakami-Tainai in Niigata, and Saikai in Nagasaki).
Bidding for offshore wind power projects is resuming after a hiatus of around one year, as bidding has
been suspended since the selection of operators for the first auction round in December 2021.

2. Marine Renewable Energy Facilities Act and the System for Selecting Operators
The Marine Renewable Energy Facilities Act was enacted in 2018 in order to promote the developmentof offshore wind power generation facilities in Japan.
Under the bidding process, the Government designates "Promotion Areas", which are sea areas that aredeemed appropriate for offshore wind power generation projects, based on the area’s environmental
condition and other factors. It then selects an operator to develop such promotion areas through anauction process. The winning bidder receives a permit to occupy the promotion area for a maximum of
30 years, and may then develop an offshore wind power generation project in the area (up to the limits
stipulated in the auction conditions).
The first selection of operators under the Marine Renewable Energy Facilities Act took place in June 2021
for the floating wind farm off Goto city in Nagasaki (output: 16.8MW). Following this, operators for thethree sea areas of Noshiro-Mitane-Oga in Akita (output: 478.8MW), Yurihonjo in Akita (output: 819MW),and Choshi in Chiba (output: 390.6MW) were selected on 24 December 2021 in what has become known
as the “first round” of bidding.
In the first round, all three bids were won by consortiums led by Mitsubishi Corporation Energy Solutions
Ltd., a subsidiary of Mitsubishi Corporation.

Officially "the Act on Promoting the Utilization of Sea Areas for the Development of Marine Renewable Energy Power
Generation Facilities".

11©Atsumi & Sakai 2023

February 2023

Although a number of evaluation points were established for the selection process during the first bidding
round, the reality was that the successful bidders secured the projects by offering a significantly lower
electricity selling price (11.99 yen - 16.49 yen/kWh) in all three sea areas compared to other bidders. This
led to criticism that the evaluation process overemphasized the electricity selling price over other factors.
In response, the Government announced in March 2022 that it would review the evaluation standards for
operator selection and, after approximately half a year of deliberation, announced a set of revised
evaluation standards in October 2022.
Under the revised standards:••

an operator will receive a higher score for submitting a project plan which proposes an earlier
operational commencement date (as opposed to just a lower electricity selling price); anda maximum limit was introduced on the number of sea areas for which any given operator can bidand win. (Successful bids cannot exceed 1 GW of output between all successful sea areas awarded
to a particular operator.)

The second round of auctions was originally scheduled to take place earlier in 2022, but was delayed due
to consideration of these revised standards. Under the process for the second round of auctions, bids
should be submitted between 28 December 2022 and 17:00 on 30 June 2023. The results of the second
round auction are scheduled to be announced in March 2024. However, if the evaluation proceedssmoothly, the Government could feasibly announce the results in December 2023.

3. Japan's Progress in Offshore Wind PowerJapan's first large-scale offshore wind farm (a project which was launched prior to the enactment of theMarine Renewable Energy Facilities Act) began commercial operation off the port of Noshiro, Akita on 22
December 2022 with an output of 84MW. Another wind farm off the port of Akita began commercial
operation on 31 January 2023, with an output of 55MW.
Further, additional areas are expected to be designated by the Government as "Promotion Areas" under
the Marine Renewable Energy Facilities Act in the future.
As shown in the table below, five sea areas already have been designated as "Promising Areas" (areas
which are expected to become the next "Promotion Areas"), and an additional 11 areas are currently underconsideration by the Government for future designation.
Development of offshore wind power generation facilities remains a key priority for the Japanese
Government's target to achieve carbon neutrality by 2050, and it is all but a certainty that offshore wind
power projects will continue to build momentum through 2023 and beyond.
Table: Current status of area classification (as of January 2023)
Classification
Promotion Area

12
3
4
5
6
7

Area
Offshore Goto, Nagasaki (auction concluded)
Offshore Noshiro-Mitane-Oga, Akita (auction concluded)
Offshore Yurihonjo, Akita (auction concluded)
Offshore Choshi, Chiba (auction concluded)
Offshore Happo-Noshiro, Akita (currently accepting bids)
Offshore Enoshima, Saikai, Nagasaki (currently acceptingbids)
Offshore Oga-Katagami-Akita, Akita (currently acceptingbids)

2©Atsumi & Sakai 2023

February 2023

8Promising Area

Areas underconsideration
where limited
preparation has
occurred

910
11
12
13
14
15
16
17
18
19
20
21
22
23
24

Offshore Murakami-Tainai, Niigata (currently acceptingbids)
Sea of Japan offshore Aomori (North)
Sea of Japan offshore Aomori (South)
Offshore Yuza, Yamagata
Offshore Isumi, Chiba
Offshore Kujukuri, Chiba
Offshore Hiyama, Hokkaido
Offshore Ganwu Minami Shiribeshi, Hokkaido
Offshore Shimamaki, Hokkaido
Offshore Matsumae, Hokkaido
Offshore Ishikari, Hokkaido
Mutsu Bay, Aomori
Offshore Kuji, Iwate
Offshore Awara, Fukui
Offshore Hibiki-nada, Fukuoka
Offshore Karatsu, Saga
Offshore eastern Toyama Prefecture---------------------------------------------------------------------------------------------------------------------------THIS NEWSLETTER IS PROVIDED FOR INFORMATION PURPOSES ONLY; IT DOES NOTCONSTITUTE AND SHOULD NOT BE RELIED UPON AS LEGAL ADVICE.
----------------------------------------------------------------------------------------------------------------------------Authors/Contacts
Miho Niunoya
Senior Partner
E: miho.niunoya@aplaw.jp

Tomoko WatanabePartner
E: tomoko.watanabe@aplaw.jp
Daniel Jarrett
Partner
Registered Foreign Lawyer (The Laws ofEngland & Wales*)E: daniel.jarrett@aplaw.jp

Kimiharu Masaki
Partner
E: kimiharu.masaki@aplaw.jp* Atsumi & Sakai is not regulated by the Solicitors Regulation Authority for England and Wales.

Please see here for our Energy practice.
Inquiries:
Atsumi & Sakai Projects & Energy Practice Team
Email: cpg_project_energy@aplaw.jp
If you would like to sign up for A&S Newsletters, please fill out the sign-up form.
Back issues of our newsletters are available here.

--------------------------------------------

Atsumi & Sakai is a multi-award-winning, independent Tokyo law firm with a dynamic and innovative approach to legal
practice; it has been responsible for a number of ground-breaking financial deal structures and was the first Japanese law
firm to create a foreign law joint venture and to admit foreign lawyers as full partners. Expanding from its highly regarded
finance practice, the Firm now acts for a wide range of international and domestic companies, banks, financial institutions
and other businesses, offering a comprehensive range of legal expertise.
Atsumi & Sakai has an outward-looking approach to its international practice, and has several foreign lawyers with extensive
3©Atsumi & Sakai 2023

February 2023

experience from leading international law firms, providing its clients with the benefit of both Japanese law expertise andreal international experience.
We are the only independent Japanese law firm with affiliated offices located in New York, London and Frankfurt which,
together with our Tokyo office and Fukuoka affiliated office, enables us to provide real-time advice on Japanese law to ourclients globally.

Atsumi & Sakai
www.aplawjapan.com/en/
Tokyo Office: Fukoku Seimei Bldg., 2-2-2 Uchisaiwaicho, Chiyoda-ku, Tokyo 100-0011, Japan
Fukuoka Affiliate Office: Tenjin Bldg. 10F, 2-12-1 Tenjin, Chuo-ku, Fukuoka-shi, Fukuoka 810-0001 JapanNew York Affiliate Office: 1120 Avenue of the Americas, 4th Floor, New York, New York 10036
London Office: 4th Floor, 50 Mark Lane, London EC3R 7QR, United Kingdom
Frankfurt Affiliate Office: OpernTurm (13F) Bockenheimer Landstraße 2-4, 60306 Frankfurt am Main, Germany

NOTICES
1. ABOUT ATSUMI & SAKAIAtsumi & Sakai is a partnership consisting of Atsumi & Sakai Legal Professional Corporation, a Japanese professional corporation, a foreign law joint venture underthe Act on Special Measures Concerning the Handling of Legal Services by Foreign Lawyers with certain Registered Foreign Lawyers of our firm, a Japanese Civil Codepartnership among Japanese lawyers, represented by Yutaka Sakai, a lawyer admitted in Japan, and a foreign law joint venture with Janssen Foreign Law Office,represented by Markus Janssen, a foreign lawyer registered in Japan to advise on the laws of the Federal Republic of Germany. In addition to lawyers admitted inJapan, our firm includes foreign lawyers registered in Japan to advise on the laws of the US States of New York and California, India, England and Wales, and the Stateof Queensland, Australia. Foreign lawyers registered in Japan to advise on state laws also are qualified to provide advice in Japan on the federal laws of their respectivejurisdictions.
Atsumi & Sakai has established an office in London operating as Atsumi & Sakai Europe Limited (a company incorporated in England and Wales (No: 09389892); soledirector Naoki Kanehisa, a lawyer admitted in Japan), and has established an affiliate office in New York operating as Atsumi & Sakai New York LLP (a limited liabilitypartnership established in New York; managing partner Bonnie L. Dixon, a lawyer admitted in New York and a Registered Foreign Lawyer in Japan). We also havea partnership with A&S Fukuoka LPC in Japan (partner: Yasuhiro Usui, a lawyer admitted in Japan) and an affiliate office in Frankfurt operating as Atsumi & Sakai
Europa GmbH - Rechtsanwälte und Steuerberater, a corporation registered in Germany providing legal and tax advisory services (local managing directors: FrankBecker, a lawyer, and Miyuki Hanaoka a tax advisor, both admitted in the Federal Republic of Germany).
2. LEGAL ADVICEJapanese legal advice provided by Atsumi & Sakai and our global offices is provided by lawyers admitted in Japan. Advice provided in Tokyo in respect of any foreignlaw on which one of our foreign lawyers is registered in Japan to advise, may be provided by such a Registered Foreign Lawyer. None of Atsumi & Sakai Legal
Professional Corporation, Atsumi & Sakai Europe Limited or Mr. Naoki Kanehisa is regulated by the Solicitors Regulation Authority for England and Wales, and none
will undertake any reserved legal activity as defined in the United Kingdom Legal Services Act 2007. Advice provided in Germany on the laws of Germany will beprovided by a lawyer admitted in Germany, and advice provided in New York on the laws of New York will be provided by a lawyer admitted in New York.

4©Atsumi & Sakai 2023