Updated March 6, 2025, 8:20 p.m.: This article’s last paragraph has been updated to include follow-up response from OCCTO.
Updated March 5, 2025, 6:00 p.m.: This article has been updated to include comments from OCCTO.
Updated Feb. 26, 2025, 1:35 p.m.: This article has been updated to include comments from Japan Interconnector and additional information on the tender process.
The tender for the development and construction of the 2GW Sea of Japan-side Hokkaido-Honshu submarine interconnector is set to have a single bidder. While two consortia expressed interest in participating, on February 26, 2025, OCCTO said a consortium comprising of the transmission arms of four major utilities is the sole eligible contender.
“We would not be surprised if the RFP was changed to accommodate some of TEPCO’s requests, and then it would be reasonable to expect that the tender should be reopened as is common practice in such cases,” said Oliver Senter, Representative Director at Japan Interconnector, part of the disqualified bidding group, in an email to Japan Energy Hub.
The qualified consortium included a list of 12 conditions when expressing its interest in participating, such as the ability to maintain its expected benefit–cost ratio regardless of changes in construction costs and schedule and the ability to recoup incurred costs if the project is not realized.
In addition to TEPCO Power Grid, the group includes Tohoku Electric Power Network and Hokkaido Electric Power Network, which are the grid operators serving the two other TSO areas the new line will connect, as well as J-POWER Transmission Network.
Consortia interested in the tender were required to either have a member with an existing TSO license or “be working on obtaining a TSO license and have sufficient financial and technical capabilities.” All four companies that are part of the approved bidding group meet the former requirement.
The consortium deemed ineligible applied under the second criteria. Alongside Japan Interconnector, the consortium includes UK-based Frontier Power, and the two companies’ joint venture Frontier Power Asia. Earlier this month, it was reported GE Vernova and Stonepeak were looking at investing in the SPC the consortium plans to establish for the project.
OCCTO’s statement lacked details about the specific reasons behind the rejection. OCCTO declined to comment on details of the review citing the involvement of sensitive business information as the reason.
The project, estimated to cost between 1.5 and 1.8 trillion yen by METI and OCCTO, is expected to be completed in the early 2030s. It will bolster the transmission capacity between northern Japan, which is one of the key wind and solar development areas, with the Tokyo area, where a significant portion of Japan’s power demand is concentrated.
“If they do proceed with just the TEPCO consortium, we could imagine that the lack of competitive tension combined with already high government estimates would result in the most expensive interconnector in history,” said Senter. “[It] would be a shame for Japanese consumers and businesses who ultimately have to pay for this infrastructure through wheeling charges for decades to come,” he ended his statement.
Senter pointed to the shorter (730-767km vs. 800km) and lower capacity (1.4GW vs. 2GW) Viking Link and North Sea Link submarine interconnectors in Europe, which cost approximately $2.2 billion (330 billion yen) to complete.
“The screening of eligibility has been completed, and [the Japan Interconnector/Frontier Power consortium] cannot participate in this project,” an OCCTO spokesman said in an email reply to Japan Energy Hub. “It is up to the qualified consortium to decide which companies it will collaborate with in the future.”
In a response to a follow-up question, OCCTO said “there are no plans to re-run the RFP.”
This article was first published on Feb. 26, 2025.
