Ministry to re-auction three offshore
The Japanese government intends to re-auction the three offshore wind projects that Mitsubishi has decided to give up.
Mitsubishi and partner C-Tech Corporation, part of Chubu Electric, have decided against proceeding with the projects which were awarded in the first round of auction for large scale offshore wind projects in 2021.
The decision was made due to high costs which more than doubled since the projects were awarded in 2021. The schemes have a total capacity of 1.76GW and targeted to be operational between 2028 and 2030.
“Offshore wind power is truly an important power source in making renewable energy the main power source for Japan. It is quite regrettable that the first project initiated to achieve the goal has ended in this way,” Ministry of Economy, Trade and Industry minister Yoji Muto said at a press conference. He added that the government “must thoroughly verify the factors that led to Mitsubishi Corporation's withdrawal”.
He confirmed the plan to re-auction the three sites – off the coast of Noshiro City, Mitane Town, and Oga City (Akita Prefecture); Yurihonjo City (Akita Prefecture) and Choshi City (Chiba Prefecture).
“In addition, we will promptly consider announcing a public call for the three domestic sea areas from which Mitsubishi Corporation withdrew, taking into account the intentions of the local communities.”
METI plans to re-auction the three projects but it has not decided yet on when to conduct the re-auction – either soon or after conducting a fourth auction.
"Projects are being suspended globally due to rising costs, and similar concerns have been raised by second-round operators," Yuichi Furukawa, wind energy policy director at METI, was quoted saying, and added that no developers in later rounds have indicated plans to withdraw.
"We must thoroughly review the system to ensure the second and third rounds are successfully completed," he said.
He added that the government will keep the ¥20bn (US$136m) deposits from the Mitsubishi-led consortiums and will bar the companies from bidding in the next offshore wind auction round.
"Japan's offshore wind market will not collapse due to Mitsubishi's withdrawal and will remain an important source of renewable energy," Furukawa said.
The industry and land ministries have been working on easing regulations, introducing new incentives and other support systems that include extending leases to 40 years from 30 years, allowing corporate power purchase agreements.
Japan aims to have 40%–50% renewable energy, including offshore wind power, by FY2040. Offshore wind capacity targets are 10GW by 2030 and 45GW by 2040 to boost energy security and renewable energy towards a net-zero emission by 2050.
It has conducted three auctions so far.
In Round 2, four sites were offered and the winners were: a consortium of JERA, J-Power, Itochu and Tohoku Electric Power for a 336MW Oga-Katagami-Akita site in Akita Prefecture; a consortium of Mitsui, RWE and Osaka Gas for a 684MW Murakami-Tainai site in Niigata Prefecture; a consortium comprising Sumitomo Corp and Tepco Renewable Power for a 420MW Saikai-Enoshima project in Nagasaki Prefecture; and a consortium comprising Japan Renewable Energy, Iberdrola and Tohoku Electric Power for a 356MW Happo-Noshiro offshore wind project in Akita Prefecture.
The Jera consortium is understood to have started sounding markets for financing for the project which is targeted to begin operation in June 2028. The other three projects are due to be operational between June and August 2029.
In Round 3, there are two sites. The winners were a consortium comprising JERA, Green power investment and Tohoku Electric Power for a 615MW Aomori South offshore wind project in the Sea of Japan; and a consortium comprising Marubeni, Kansai Electric Power, BP, Tokyo Gas and Murataka for a 450MW Yuza offshore wind project in Yamagata Prefecture. Both R3 projects are due to be operational by June 2030.
