Mitsubishi reviews offshore wind in Japan amid economic challenges #JapanFinance

Mitsubishi Corporation is conducting a review of its business plans for offshore wind power generation projects in Japan.

The reassessment is due to an altered macroeconomic environment for the offshore wind power sector brought about by the Covid-19 pandemic and the Ukraine crisis, which have led to challenges such as inflation, a weaker yen, strained supply chains and rising interest rates.

Mitsubishi Corporation, through a consortium led by its subsidiary Mitsubishi Corporation Offshore Wind, has been developing three offshore wind projects in Japan since being selected as the operator in Japan’s inaugural state-run offshore wind auctions in December 2021.

The projects are located offshore Noshiro City, Mitane Town and Oga City in Akita Prefecture, offshore Yurihonjo City in Akita Prefecture and offshore Choshi City in Chiba Prefecture.

With a combined capacity of 1.76GW, they were expected to commence operations between 2028 and 2030.

Mitsubishi Corporation stated: “As a result of these unexpected changes, we are currently reviewing the business plans for these projects. We will consider the appropriate next steps after thoroughly examining the results of the review.”

Japan has a low rate of energy self-sufficiency and heavily relies on energy imports, with offshore wind power seen as a critical component to ensure a stable energy supply and reduce greenhouse gas emissions.

The country aims to achieve 10GW of offshore wind capacity by 2030 and 45GW by 2040.

Mitsubishi Corporation aims to support the transition to a carbon-neutral society through its commitment to offshore wind power generation.

Chubu Electric Power, in partnership with Mitsubishi through its unit C-Tech for all three projects, is exploring measures to enhance profitability amidst re-evaluating the feasibility of its offshore wind endeavours, as reported by Reuters.

The company reported a loss of 18bn yen ($116m) on the three Mitsubishi-led projects between April and December 2024, attributing this to escalating construction costs and other economic pressures.

Chubu Electric Power’s net profit for the same period stood at Y167.2bn – a 53% decrease from the previous year.

“Mitsubishi reviews offshore wind in Japan amid economic challenges” was originally created and published by Power Technology, a GlobalData owned brand.

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