OCCTO awarded 6.3GW on a derated basis across 38 projects in Japan’s second long-term decarbonization auction (LTDA), accounting for 47% of the 13.6GW bid capacity, results published on April 28, 2025, show.
Approximately half of the capacity consisted of three nuclear power plants, including Japan Atomic Power Company’s Tokai Unit 2, Hokkaido Electric Power’s Tomari Unit 3, and TEPCO’s Kashiwazaki-Kariwa Unit 6, awarded under a new category set up for financing safety upgrades.
Battery storage accounted for 22% of the awarded capacity and majority of the projects. Of the 27 awarded BESS contracts, six are for assets with six-hour or longer duration. The remaining 21 are for facilities with duration between three and six hours. At 1.4GW, the awarded battery storage capacity was about 25% higher than in the first LTDA.
LNG-fired power plants, which are awarded under a separate category from “decarbonization power sources,” made up 21% of the total. Four projects totaling 1.3GW were awarded.
The remaining awarded capacity was split among two conventional hydro, one six-hour-plus pumped hydroelectric storage (PHES), and one ammonia co-firing conversion project. Unlike in the first auction, no hydrogen co-firing conversion and biomass power plant projects participated.
Excluding the three-to-six-hour PHES category in which none of the 98MW of bid capacity was awarded, battery storage was the most oversubscribed technology, with only 20% of the bid capacity awarded. Kyushu, Tohoku, and Chubu were the most oversubscribed TSO areas with 10%, 16%, and 21% of bid capacity awarded, respectively.
Japan launched the LTDA, part of the broader capacity market, in FY2023 to provide stable revenue streams for new renewable energy, battery storage, and other low-carbon power sources, as well as LNG-fired projects positioned as transitional assets.
