Mitsubishi Scraps Japan’s Offshore Wind Projects as Costs Rise

Mitsubishi Corp said on Wednesday it would withdraw from three Japanese offshore wind power projects due to soaring costs, in a blow to the energy security goals of a country eager to reduce its dependence on imported fuel.

A Mitsubishi-led consortia won the first state auctions for the three wind farms in Chiba and Akita prefectures in 2021. The farms had projected capacity of 1.76 gigawatt (GW) and were set to start operations around 2028 to 2030.

In a statement on Wednesday, Mitsubishi said the business environment for offshore wind power has since significantly changed worldwide due to tighter supply chains, accelerating inflation and fluid interest rates.

"To adapt to these unexpected changes, we have been pursuing various options including reassessment of costs, project schedule, and revenue. However, after discussions among the partners, we have determined that establishing a viable business plan is not feasible given the current conditions," it said.

Earlier this year, Mitsubishi logged a charge of 52.2 billion yen ($354 million) on the projects. On Wednesday, partner Chubu Electric Power 9502.T said it expected a loss of around 17 billion yen this fiscal year due to the withdrawal.

Japan wants offshore wind farm capacity to reach 10 GW