Japan’s Ministry of Economy, Trade and Industry (METI) held a second review on October 24th to go over the details for 2017 feed-in-tariff (FiT) rate as well as project setup. At the meeting, they have decided to use tender management for solar PV by October 2017, hoping to cut prices through tender system.
The initial plan for the tender management is as follow according to Nikkei BP’s report: the bidding program will be introduced in early-February 2017, bidding projects will be announced in early-May, first tender will start in early-September, and all will be completed by the beginning of October. First tender will be conducted in 2017 and there will be two more tenders (summer and winter) in 2018, totaling three tenders.
Whether there will be new tenders after 2019 will depend on how the three tenders go.
Commercial power plant of 2MW is the basic threshold when planning for the bidding program
METI regulated that commercial power plant with a scale of more than 2MW need to participate in the bidding. The threshold for 2MW is based on the following: A solar project that exceeds this scale will be incorporated into an extra-high voltage cable of 7000V or higher. JPEA responded to this and said some manufacturers will reduce the scale of power plants through splitting their power plants. They hope METI can take the nature of the project into consideration rather than the installed capacity.
When planning for the bidding scheme, the Commission proposed two options – pay-as-bid (bid amount of the contract) and uniform pricing (contract for all winners). Bidders with the lowest price will win in pay-as-bid case. In uniform pricing case, they will use the average bid price to sign the contract. The Committee believed that pay-as-bid option is more appropriate for Japan.