Mitsubishi just dealt a blow to Japan's plans to decarbonize
What's the story
Mitsubishi has announced its withdrawal from three offshore wind projects in Japan, a major setback for the country's renewable energy sector. The decision comes as a result of rising construction costs and an unfavorable business environment. The company had previously been selected to operate these projects in Akita and Chiba prefectures with a total projected capacity of 1.76GW by 2028-2030.
Impact assessment
Setback for Japan's renewable energy goals
Mitsubishi's exit from the offshore wind projects could further delay Japan's already behind-schedule renewable energy rollout. The country had planned to increase its offshore wind farm capacity to 10GW by 2030 and 45GW by 2040. However, with this latest development, those targets now seem even more difficult to achieve.
Government action
Japanese government to re-tender sites
In light of Mitsubishi's decision, the Japanese government has decided to re-do tenders for the three sites from which the consortium withdrew. This was announced by Trade Minister Yoji Muto during a meeting with Mitsubishi executives. The move is part of Japan's continued commitment to offshore wind projects despite challenges faced by some developers.
Industry concerns
CEO calls for business certainty
Mitsubishi's CEO Katsuya Nakanishi has called for more business certainty in the rapidly changing environment. He stressed on the need for a system that provides predictability and allows effective risk management. This comes as offshore wind projects globally are grappling with rising costs, making Japan's energy transition even more challenging amid its heavy reliance on fossil fuels.