Japan awards 208MW in oversubscribed eighth solar auction

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The 35MWp Isohara solar farm in Japan. Image: BayWa r.e.

Japan’s eighth solar auction, for projects with a generation capacity of more than 250kW, has closed with bidders securing a total of 208MW.

The oversubscribed auction included 185 bids, representing a total capacity of 249MW. The 135 successful bids had a weighted average of JPY10.82/kWh (US$0.0979/kWh), with the lowest winning bid at JPY10/kWh (US$0.09048).

That bid is the same as the lowest bid in Japan’s sixth auction last November and down 4.6% on the minimum bid seen in the country’s seventh solar auction, which took place in December and allocated 69MW.

Project developer and PV module manufacturer Canadian Solar announced itself as one of the winners in the latest tender, winning 86MWp of capacity that includes one project of 80MWp and two of 3MWp that will be developed in the Tohoku region.

Those projects are expected to reach commercial operation between 2024-2026 and once constructed will enter into a 20-year power purchase agreement with Tohoku Power Electric Company.

Having carried out its first solar auction in 2017, Japan has so far awarded approximately 1,219MW of capacity through the eight rounds of its solar tender programme.

According to a recent report from the International Renewable Energy Agency, a challenge for Japanese authorities has been retaining qualified bidders, with developers indicating that constraints regarding grid connection and land availability, as well as bond confiscation rules, reduced their interest in placing bids.

Indeed, in the country’s fifth solar auction, despite more than 416MW initially on offer, the country awarded just 40MW of capacity.

Figures from RTS Corporation reveal that Japan deployed around 8GW of solar last year, taking its cumulative installs up to around 70GW. Modelling from the Tokyo-headquartered analysis firm suggests that a business-as-usual scenario would see the country achieve around 130GW of installed solar by 2030 and under an ‘accelerated scenario’ could reach 160GW.

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