Mitsubishi abandons offshore wind farms in Japan

A senior official in the industry ministry said that Japan wants to re-auction as many offshore wind sites as possible as soon as they can, subject to local community consent.

The trading house Mitsubishi Corp announced on Wednesday that it would no longer build wind farms in the prefectures of Akita and Chiba due to rising costs.

In 2021, the first state-wide auctions were held to award the rights to construct and operate these farms. The farms have a total planned capacity of 1,76 gigawatts and were scheduled to begin between 2028 and 3030.

Japan has already held three major auctions to increase its offshore wind power capacity. It aims to reach 10 GW in 2030 and 45 GW in 2040. RWE, Iberdrola and BP are among the winners of the later rounds.

Yuichi Furukawa is the director of wind energy policy at Japan's Industry Ministry. He said that the government would examine the reasons behind Mitsubishi's decision to withdraw and the findings will be reflected in any future auctions.

He said that the decision has not been made yet on whether to re-auction sites first or move forward with a 4th auction.

The Japan's land and industry ministries are working to ease regulations, such as extending the operation period by a decade, in order to increase returns for developers, given the rising costs of construction.

Fukurawa stated that "projects are being suspended worldwide due to rising costs" and that second-round operators have also expressed similar concerns. However, he added that developers from later rounds had not indicated any plans to withdraw.

He said, "We need to thoroughly review the system in order to successfully complete the second and third round."

He said that the government would keep the 20 billion yen ($136 millions) deposits made by the Mitsubishi-led companies and prohibit them from bidding at the next round of offshore wind auctions.

Furukawa stated that the Japanese offshore wind market would not be affected by Mitsubishi's decision and will continue to be an important source for renewable energy. ($1 = 147.3300 Japanese yen) Reporting by Yuka Okasaka, Additional reporting by Kentaro OKasaka, Writing by Katya Glubkova and Editing by Edwina gibbs

(source: Reuters)