Mitsubishi Exit Deals Blow to Japan’s Offshore Wind Ambitions
(Bloomberg) -- Mitsubishi Corp. will withdraw from three offshore wind projects in Japan, according to a person familiar with the matter, in a blow to the fledgling industry as it grapples with slow progress and rising costs.
A consortium led by the trading house, which includes a unit of Chubu Electric Power Co. and Venti Japan Inc., will pull out of projects in Chiba and Akita prefectures, the person said, asking not to be identified because the information is private. In February, Mitsubishi announced it was reviewing business plans for the three projects due to a changing macroeconomic environment. It had won the rights to develop and operate the sites in 2021.
Spokespeople for Mitsubishi and Chubu Electric said nothing has been decided. Venti Japan did not respond to Bloomberg’s request for comment.
The move comes as the global offshore wind industry falters amid high interest rates and material costs, and a pushback against green policies in some countries. Most notably in the US, President Donald Trump’s stance against wind power has derailed several projects in that country, clouding the industry’s outlook.
Japan, where the sector is still nascent, is aiming to have 10 gigawatts of offshore wind power capacity by the end of the decade, and wants to boost that to 30-45 gigawatts by 2040. The nation remains heavily reliant on fossil fuels like coal and gas for electricity, and has emphasized the need to jumpstart offshore wind projects to bring more clean power to the grid.
Meanwhile, the government is considering allowing offshore wind developers to extend their site permits without repeated auctions, in an effort to improve profitability.
Under the current framework, companies are given 30-year permits to exclusively use sites won through a tender, and a new auction is conducted at the end of that period. The government is proposing changing that rule to grant a 10-year extension on existing permits if projects meet certain requirements including supplying a stable source of electricity, according to documents released by a trade ministry panel on Tuesday.
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