Japanese offshore wind hotspot urges government to relaunch tender quickly

One of Japan’s potentially leading regions for offshore wind power has reportedly urged authorities to relaunch a tender after Mitsubishi Corp withdrew from three developments due to rising costs.

Two of the projects dropped by Mitsubishi were off the coast of Akita prefecture in western Japan with another off the Chiba prefecture, to the east of Tokyo.

“We were deeply shocked by the withdrawal,” said Miura, referring to Mitsubishi’s decision during a panel discussion Thursday at the Global Offshore Wind Summit in Akita.

Mitsubishi rescinded rights to develop and operate two sites in Akita and a third in Chiba prefecture after chief executive Katsuya Nakanishi claimed that construction costs had more than doubled since bids were placed.

Mitsubishi's decision was also a blow to Japan’s plan to have 10GW of offshore wind power capacity installed by the end of the decade, rising to 30-45 GW by 2040.

The nation relies heavily on imports of liquefied natural gas for electricity and has emphasised the need to develop renewable energy projects to bring more clean power to the grid.

But the offshore wind industry has faced surging material costs, high interest rates and a depreciating Japanese currency.

Fourth wind tender

Officials said the auction — which had been due to launch on 14 October — was merely being pushed back to allow the government to reassess market conditions and decide on its reform proposals.

Delays to projects are making investors anxious about future opportunities, said Masaya Tajima, director for wind power energy for Hokkaido prefecture, another of Japan’s leading regions for the sector.

Other renewable energy developers like JERA Nex bp sounded more optimistic about the industry’s future. “There’s a perception that offshore wind power is dead,” Masato Yamada, the company’s senior vice president Japan, said at the event, “but the initiative hasn’t even truly begun.”