In 2025, Japan took a major policy step for offshore wind by passing legislation that enables development in the EEZ. But market momentum slowed: no auctions were completed last year, and already awarded projects were cancelled.
Looking ahead to 2026, the government is expected to focus on redesigning the auction framework and stabilizing the already awarded projects:
Round 1 projects (awarded 2022)
The Mitsubishi Corporation-led consortium cancelled three fixed-bottom projects from the Round 1 auction, totaling 1.7 GW, due to unrealistically low bids, grid and port constraints, and long, unpredictable permitting, as recently highlighted by the government. These projects were expected to be the first large-scale developments to reach COD in Japan. The government plans to re-auction the sites, currently expected to happen before the Round 4 auction in 2026, though timing remains uncertain.
Round 2 (2023) and 3 (2024) projects
To ensure the successful delivery of projects awarded in Round 2 and 3, the Japanese government introduced several policy reforms throughout 2025. These include allowing zero-premium projects from these rounds to participate in the Long-Term Decarbonization Power Source Auction (LTDA), providing greater flexibility to change turbine suppliers, enabling more flexible use of ports, and establishing a new principle that seabed occupation permits can be renewed after 30 years if certain conditions are met.
Round 4 (likely 2026)
Japan’s Round 4 auction was postponed from 2025 to allow the government to focus on the reform process, despite Japan’s goal of holding annual auctions. In response, the government proposed a revised auction design to improve participation and restore pricing discipline in future rounds. Key changes include introducing a price floor and ceiling, reducing the emphasis on speed of implementation to reflect supply-chain constraints and allow more realistic procurement, tightening withdrawal rules, and adopting a more detailed qualitative scoring framework to improve transparency.
Aegir Insights’ clients have access to our Japan Playbook, diving deeper into the Japanese offshore wind market.
Meet Aegir Insights in Tokyo
Meet us at Wind Expo Japan in Tokyo in March 2026, to discuss market situation and opportunities in offshore wind in person. Reach out to VP Business Development Matthew Delany, if you are attending the conference as well.
Aegir Newsletter: Stay up-to-date with development in renewable energy and new analysis by Aegir Insights
Delivered straight to your inbox, Aegir Insights' intelligence newsletter will sharpen your market insight with exclusive analysis on key markets, developments, and technologies shaping onshore wind, offshore wind and storage/hybrids.