Japan’s Ministry of Economy, Trade and Industry (METI) has announced the results of the autumn auction for solar projects with a generation capacity of more than 500 kW.
The ministry said it has selected 27 solar power projects with a combined capacity of 39.8 MW in the procurement exercise, after having initially accepted 72 project proposals with a combined capacity of 185.6 MW for review.
The METI had originally planned to allocate around 300 MW of solar capacity in the auction, but it then raised this to 416.1 MW as the fourth solar auction delivered lower than expected volumes. In this exercise, the Japanese government procured 63 projects with a total installed power of 195.8 MW.
The big drop in capacity registered in the fifth auction is apparently due to the lack of big solar projects among the winning schemes, as selected projects range just from 792 kW to 2 MW. In the fourth auction, four larger facilities with capacity between 25 MW and 30 MW had been selected along with 59 small solar park projects.
Slight decrease in average price
The METI has also revealed that in the latest auction, for which a ceiling price of ¥13/kWh had been set, the lowest price offered was ¥10.99/kWh ($0.10) and the highest ¥13.0 for an average price of ¥12.57.
In the fourth auction held last summer, the lowest price was slightly lower at ¥10.50/kWh ($0.0988), while the highest price was ¥13.99 and the average price was ¥12.98.
In the third auction finalized in January 2019, the METI had selected seven projects with a total capacity of 196.6 MW. Average price was ¥15.01 ($0.137) per kWh, with the lowest bid ¥14.25 and the highest ¥15.45.
The second auction, in September 2018, was a bit more successful in terms of capacity, with around 197 MW and a lowest bid of ¥16.47. In another under-subscribed first auction held in November 2017, only 140 MW of a hoped-for 500 MW of capacity was awarded, at an average price of ¥19.6/kWh.
Through the first three auctions, the METI had initially intended to secure 1-1.5 GW of new PV capacity. The main issue solar developers have to address in Japan is land availability – in part due to restrictions on the use of abandoned agricultural sites – and grid constraints.