Recently, the Japan Green Investment Promotion Agency announced the final results of the 18th round of large-scale solar energy projects. The auction, involving 105 MW of photovoltaic projects, is the agency's largest to date. In this procurement activity, a total of 33 projects successfully won the bid, with project sizes ranging from 500 kilowatts to 25.8 megawatts.
In this auction, the lowest winning bid was 7.94 yen per kilowatt hour (approximately US$0.053), the highest winning bid was 9.19 yen per kilowatt hour, and the average final price was 8.55 yen per kilowatt hour. The auction's ceiling price was set at 9.35 yen per kilowatt-hour, setting a price ceiling for the market.
Compared with previous auctions, especially the last round completed at the end of August, it can be seen that the lowest winning bid in this auction has dropped from the previous one. In the August auction, the lowest price was 8.95 yen per kilowatt-hour, while the allocated capacity was 69 MW. This shows that competition in the market is intensifying, with bidders offering more competitive prices.
market trend
Looking back at the solar energy auctions over the past year, we can see the Japanese government's active promotion in the field of renewable energy. In 2021, the government allocated a total of 675 MW of PV capacity through three different auction rounds. In the previous auction, the total allocated capacity was higher at 942 MW.
In the 15th solar auction round that ended in March this year, the Green Investment Promotion Agency only allocated 16.2 MW, which caused some concern. The total capacity is 175 MW, and the market has attracted only relatively small investments. However, it also reflects the balance between demand and supply for renewable energy in the market, and the government's efforts to ensure reasonable prices in auctions.
Price trend analysis
By comparing the price trends of each auction round, we can observe an obvious phenomenon: the lowest winning bid price gradually decreases. In the 14th round of auctions last November, the lowest price was 9.65 yen per kilowatt-hour, while in the latest round of auctions, this price has dropped to 7.94 yen per kilowatt-hour. This trend may be influenced by technological progress and market maturity, pushing bidders to propose more competitive prices.
However, it is important to note that while the minimum winning bid price fell, the average final price did not fall in tandem. This may be because the winning bids for some large projects were relatively high, affecting the overall average. This also shows that in addition to pursuing low costs, bidders also focus on the scale and sustainability of the project.
The Prospects of Renewable Energy in Japan
The series of auction results reflects Japan's progress in promoting large-scale solar projects. Renewable energy has gradually increased its share in Japan's energy mix, laying a solid foundation for achieving sustainable development goals. The government encourages investors to participate in renewable energy projects through auctions, which promotes market development and technological innovation.
In the future, as technology continues to develop and the renewable energy market matures, we can expect to see more investors pouring into this space. At the same time, government support at the policy and regulatory levels will continue to have a positive impact on the development of renewable energy.