Monthly Report

METI eyes upping target capacity and creating dedicated nuclear category in the 2nd long-term decarbonization auction

July 3, 2024
TEPCO Nuclear Power Plant
METI intends to add a category dedicated to nuclear power plant safety upgrades to the second long-term decarbonization auction. (Image: TEPCO Holdings)

At a meeting held on June 28, 2024, the Ministry of Economy, Trade and Industry (METI) outlined the structure under consideration for Japan’s second Long-Term Decarbonization Auction (LTDA). The key changes include increasing the sought capacity from the first auction’s 4GW to 5GW and establishing a category designated for investments in nuclear power plants.

The presented plan breaks the 5GW sought down as follows:

  • 1GW of existing thermal plant refurbishment
  • 750MW of BESS/pumped-storage hydro able to supply power for three to six hours
  • 750MW of BESS/pumped-storage hydro able to supply power for over six hours
  • 2GW of investment in safety measures at existing nuclear power plants
  • 500MW of other renewable capacity

In addition to the above, the government also eyes seeking 2.24GW worth of LNG power plant capacity in the second auction comprising of 2GW newly allocated to the second auction and 240MW leftover capacity that was not awarded in the first auction.

Bid price ceilings for selected categories were adjusted upward slightly.

Bidding in the second LTDA is expected to take place between January 20 and 27, 2025. In preparation for that, the government expects to release further details about the final terms and conditions of the auction in September 2024 and open the auction for operator registration on October 15, 2024.

In Japan’s first LTDA, which was held in FY2023, 4.01GW of “decarbonization power sources” capacity and 5.76GW of LNG capacity was awarded. Our free research brief detailing the first LTDA results offers a breakdowns of the awarded capacity by regions and operators among other things.

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