Mitsubishi exits three offshore wind power projects awarded in Japan's first auction

Japan's Mitsubishi Corp. said Aug. 27 that it has decided to exit three offshore wind power projects, awarded in the country's first offshore wind power auction in 2021, due to deteriorating business conditions.

The move came after Mitsubishi said Feb. 3 that it was reviewing the business plans for offshore wind power projects, being developed through consortia led by its subsidiary, due to material changes in the macroeconomic environment.

"As announced in February 2025, MC has been reviewing the business plans for these projects due to unexpected changes in the business environment. As a result of the review, we have decided not to proceed with the development of the projects," Mitsubishi said in a statement.

In December 2021, Mitsubishi was selected as the operator of the three offshore wind projects in Noshiro city, Mitane town and Oga city in Akita prefecture; Yurihonjo city in Akita prefecture; and Choshi city in Chiba prefecture.

The projects, based on bottom-fixed offshore wind power generation facilities, were expected to start up in December 2028 in Noshiro city, Mitane town and Oga city in Akita prefecture with an output capacity of 478.8 MW; in Yurihonjo city in Akita prefecture, anticipated to come on stream in December 2030 with a capacity of 819 MW; and in Choshi city in Chiba prefecture, scheduled to commence in September 2028 with a capacity of 390.6 MW.

Supporting LNG

Mitsubishi's announcement of its exit from the three offshore wind power projects, with a combined capacity of 1.688 GW, comes as Japan aims to boost the share of renewable energy in the country's power generation mix to 22%-24% in fiscal year 2030-31 (April-March) and to 40%-50% in FY 2040-41 under the 6th and 7th strategic energy plans.

Japan's targeted increase in the share of renewable energy in its power generation mix, from 22.9% in FY 2023-24, underscores the importance of LNG in supporting the intermittent nature of renewables.

Analysts said that Mitsubishi's exit from the offshore wind projects could not only negatively impact other projects but also amplify the role of LNG in the country's power generation mix.

"Mitsubishi's exit from Japan's offshore wind projects increases the country's reliance on gas-fired generation, and by extension LNG demand, as it was counting on accelerated development of renewables to lower consumption of thermal fuels," Eric Yep, principal analyst for First Take Gas at S&P Global Energy, said.

"However, Japan's offshore wind power projects have been facing obstacles such as soaring construction costs, heavy reliance on imported components and a weak yen; and wind installation costs outside mainland China have broadly failed to decrease significantly," Yep said.

Takayuki Nogami, chief economist at Japan Organization for Metals and Energy Security, said there is concern that the introduction of offshore wind power generation could delay the enhancement of power generation capacity due to the review of frameworks.

"This could increase the likelihood of difficulties in achieving the proactive renewable energy introduction targets suggested in the Strategic Energy Plan, including offshore wind power generation for FY 2040-41 and beyond," Nogami said.

"In response to the slowdown in the expansion of renewable energy capacity, including offshore wind power generation, it is expected that the relative expansion of gas-fired power generation will increase in the future, along with a growing importance of securing LNG for a longer period," Nogami added.

The 7th Strategic Energy Plan, approved by the Japanese cabinet in February, projects that the country will need 53 million-74 million mt of natural gas in its primary energy supply in FY 2040-41, depending on the scenario.

"A setback on renewables would move projections toward a scenario of delayed decarbonization where there is higher LNG upside," Yep said.