In Short : Due to factors like rapidly increasing turbine costs, supply chain interruptions, and inflation-driven economic pressures, Mitsubishi Corporation has announced its withdrawal from three significant offshore wind projects in Japan that were initially won in the country’s first public auction.
Maintaining Equity While Developing Technological Capabilities
The projects were considered financially unviable by Mitsubishi and its consortium partner, C-Tech (part of Chubu Electric), despite state efforts to alleviate the financial load, including proposed retroactive hikes in power tariffs and lease-term extensions from 30 to 40 years.
Impact and Significance of Clean Energy
This departure is a blow to Japan’s strategy for renewable energy. Just 1.1% of the nation’s electricity is now generated by wind. The pullout makes it more difficult for the government to reach its 2040 target of increasing that to between 4% and 8%.
About the Initiative
These offshore wind contracts were obtained by Mitsubishi, in partnership with affiliates Chubu Electric, through Japan’s first state-run auctions in 2021. The projects were supposed to start up around 2028 or 2030.
