Mitsubishi Corp. Reconsiders Offshore Wind Projects in Japan Amid Changing Business Environment
Mitsubishi Corp. is reviewing how to proceed with its offshore wind projects in Japan given a “significantly changed” business environment, showing that the country is not immune to rising costs across offshore wind projects globally.
Japan, heavily reliant on energy imports, has turned to renewable energy as a means to enhance energy security and achieve decarbonization by 2050. Mitsubishi has taken the lead in consortia that secured Japan’s first state-run offshore wind auctions in 2021.
The government initiated the auctioning of sites for future offshore wind farms in 2020, aiming to reach 10 gigawatts (GW) by 2030 and 45 GW by 2040. A year later, consortia led by Mitsubishi were chosen to develop three projects in the Akita prefecture and the Chiba prefecture, with a combined capacity of 1.76 GW and a projected startup between 2028 and 2030.
“We will consider the appropriate next steps after thoroughly examining the results of our review,” Mitsubishi stated, leaving the details undisclosed.
Yuriy Humber, CEO of K.K. Yuri Group, noted that Mitsubishi’s potential withdrawal from the projects could prompt the government to provide additional support, creating a delicate situation. The uncertainty raises questions about the extent of state compensation for global risks in the offshore wind sector.
Authorities from Japan’s industry ministry overseeing wind power generation were not available for immediate comment on the matter.
Japan has conducted three offshore wind auctions so far, with winners including prominent western companies like RWE, Iberdrola, and BP. Recent adjustments to auction rules were made by the government to address the escalating costs in the sector.
As Mitsubishi evaluates the evolving landscape of offshore wind projects in Japan, the industry awaits further developments that could shape the future of renewable energy in the country.
(Source: Reuters)