Tokyo, Japan, 10 Nov 2025 | Japan should establish a public-private forum to help shape the country’s offshore wind future and restructure its offshore wind auctions to ensure project viability, says a new white paper from The Global Wind Energy Council (GWEC), produced in partnership with renewable energy consultancy OWC.
The paper, Unlocking Japan’s Offshore Wind Potential: Strategic Pathways to Overcome Market Bottlenecks and Drive Industrial Growth, outlines how Japan can align industry to ensure project viability through to final investment decisions, as well as how to align industry and policymakers.
Japan has held three rounds of offshore wind auctions. The sole bidder from Round 1 has since withdrawn, and the winners of Rounds 2 and 3 are facing severe financial challenges around the development of their projects. The project trajectories following these first auctions highlight the need for timely reform, with a more effective auction design a priority. A new approach must reflect industry feedback and keep pace with a changing market.
Without proper restructuring of Japan’s offshore wind auction framework, the country risks significant delays in achieving its decarbonisation and energy security goals, which are critical to ensuring timely project delivery and unlocking the broader economic benefits of job creation.
“Japan holds vast offshore wind potential and cannot afford to miss its chance to become an offshore wind leader especially within the Asia-Pacific region. To put the industry back on a growth trajectory, Japan must pursue auction reforms, reassess offtake mechanisms, and remove critical market bottlenecks, as outlined in GWEC’s white paper. By taking these steps, there is no doubt that offshore wind will remain the backbone of Japan’s power mix on its path toward carbon neutrality by 2050.
Once Japan recalibrates its course and regains momentum in offshore wind development, unlocking this potential will deliver clean, affordable, and locally produced renewable energy, and also stimulate local economies through job creation, revitalised regional industries, and new opportunities for coastal communities.”
Takeshi Matsuki, Japan Country Manager, GWEC
“OWC is pleased to contribute to this important white paper focused on unlocking Japan’s offshore wind potential. Japan stands at a pivotal moment in its clean energy transition, and offshore wind has emerged as a central pillar of its strategy. While frameworks such as Round 1–3 tenders have laid the groundwork, recent developments have highlighted the need for structural and institutional reform to ensure project delivery and investor confidence.
To enable the stable and scalable deployment of offshore wind, Japan needs to address three critical areas: auction framework, offtake mechanisms, and other market bottlenecks. Timely auction reform, including evaluation criteria optimization will be key to accelerating capacity build-out. Enhancing offtake mechanisms—such as updating price caps and transitioning to more bankable schemes — will help align bids with market realities. In parallel, resolving bottlenecks around certification, curtailment, and supply chain visibility will be essential to unlock investment and promote regional economic development.”
Masataka Nakagawa, Country Manager – Japan, OWC
GWEC’s white paper outlines both the short-and-long-term recommendations to strengthen Japan’s offshore wind framework across three key areas: (1) the auction framework, (2) offtake mechanisms, and (3) other market bottlenecks.
The short-term measures can be implemented without legislative amendments and focus on the re-tendering of Round 1 and the upcoming auction round, while the long-term measures are envisioned for Round 5 and beyond to ensure sustainable market growth and strengthen investor confidence.
Under auction reforms, it is critical to redesign the offshore wind auctions through timely and structured dialogue between the public and private sectors, along with optimisation of evaluation criteria to balance price and non-price factors. In the longer term, improvements to the centralised model and the introduction of a two-stage auction structure in territorial waters are needed to provide greater certainty for developers and strengthen business cases at the auction stage.
On offtake mechanisms, it is essential to review current price limits to prevent unrealistic bids and ensure alignment with prevailing market conditions. The reform of the existing Feed-in Premium (FIP) scheme towards either two-sided Contract for Difference (CfD) or a Feed-in Tariff (FIT) would provide more stable returns, while wider access to Corporate Power Purchase Agreements (CPPAs) would help mitigate investor and developer risks.
To address broader market bottlenecks, greater transparency around certification requirements and the adoption of risk-based assessments in the wind farm certification process are needed. It is also important to establish Commercial Operation Date (COD)-based targets instead of pipeline development targets to enable timely investment and strengthen Japan’s domestic supply chain, while minimising curtailment and introducing compensation mechanisms to enhance project bankability.
GWEC and the white paper working team members including OWC presented the findings to the Ministry of Economy, Trade and Industry (METI) and the Ministry of Land, Infrastructure, Transport and Tourism (MLIT) and the Ministry of Environment (MOE) in a series of meetings and updates at the end of October. These government agencies have expressed strong interest for the recommendations outlined in the report.
As an immediate next step, GWEC will develop a detailed plan for the bridging forum to facilitate dialogue between the public and private sectors, which will be key to building a robust policy framework. With the platform in place, we can build a transparent and reliable framework that strengthens project viability, supports Japan’s clean energy goals, drives economic growth, and create a more predictable environment for offshore wind developers and stakeholders.