Withdrawal from Offshore Wind Power Projects: Establish System to Facilitate Spread of the Renewable Energy Source

Editorial

16:09 JST, September 5, 2025

Offshore wind power generation, which has been positioned as a decisive factor in the spread of renewable energy, has stumbled from the outset. The government needs to rethink its plans to ensure decarbonization efforts continue unabated.

A consortium including Mitsubishi Corp. has announced its withdrawal from offshore wind power projects in three sea areas — two off Akita Prefecture and one off Choshi, Chiba Prefecture. It said that soaring material costs have more than doubled construction expenses, rendering the projects unprofitable.

The government put legislation into effect in 2019 to accelerate the introduction of offshore wind power generation. Mitsubishi’s projects were the first of this kind approved through public tender.

Since the government had high hopes for the projects, the fact that it has been forced to review them is a major blow to its strategy to expand renewable energy.

By offering an incredibly low price in public bidding, Mitsubishi secured the projects in all three sea areas in 2021. However, even then, strong doubts were raised about the profitability of such low-price contracts.

Mitsubishi President Katsuya Nakanishi said, “Costs ballooned far beyond our projections.” There is no denying the company’s outlook was overly optimistic, and it must reflect seriously on this.

The projects in the three sea areas were scheduled to begin operations between 2028 and 2030, aiming to supply electricity equivalent to two nuclear reactors. Even if the bidding is reopened, delays in the introduction are inevitable, likely causing significant disappointment among local communities that had hoped for regional vitalization.

The government’s Strategic Energy Plan has set a target to increase the share of renewable energy in the power mix from about 20% in fiscal 2023 to 40%-50% in fiscal 2040. The share of wind power generation is also targeted to rise from 1.1% to 4%-8%.

Surrounded by sea on all sides, Japan has significant potential for expanding offshore wind power. It also offers the advantage of causing fewer noise issues than onshore wind. Offshore wind power is considered key to promoting renewable energy, and efforts must be made to realize the dissemination strategy.

Offshore wind power requires tens of thousands of components, including turbine blades, foundations and transmission lines, with material costs accounting for a large portion of project expenses. An estimate suggests that development costs have risen by about 40% since 2019. Withdrawals from and downsizing of projects are also occurring in Europe and the United States.

To prevent setbacks in the spread of offshore wind power, the government will likely need to consider measures such as national subsidies for construction costs. To improve profitability, it is hoped that the government will work to extend the period of using sea areas, among other steps.

Starting with this year’s public tender, the government has enabled up to about 40% of the surge in material costs to be reflected in electricity prices. It will also be essential for the public and private sectors to work together to gain public understanding.

Japanese manufacturers have withdrawn from the production of large wind turbines, leaving Japan reliant on imports. A medium and long-term perspective will also be crucial to strengthen industrial capabilities and parts supply chains.

(From The Yomiuri Shimbun, Sept. 5, 2025)