By Yuka Obayashi
TOKYO (Reuters) -Japan’s government wants to re-auction three offshore wind sites abandoned by Mitsubishi-led groups as soon as possible, pending consent from local communities, a senior industry ministry official told Reuters.
Trading house Mitsubishi Corp said on Wednesday it will drop plans to build the wind farms in Chiba and Akita prefectures due to soaring costs.
The rights to build and operate the farms were awarded in the state’s first major auction rounds in 2021. They have a combined planned capacity of 1.76 gigawatts (GW) and were slated to start between 2028 and 2030.
Japan is looking to have offshore wind capacity of 10 GW by 2030 and 45 GW by 2040 to bolster energy security and cleaner power, and has held three major auctions so far. Winners of later rounds include RWE, Iberdrola, BP and domestic players.
Yuichi Furukawa, wind energy policy director at Japan’s industry ministry, said the government will examine the factors behind Mitsubishi’s withdrawal and its findings would be reflected in future auctions.
It has not yet decided whether to first re-auction the sites or proceed with a fourth auction, he added.
Japan’s industry and land ministries are working on easing regulations, including extending operation periods by a decade, to improve returns for developers as construction costs surge.
“Projects are being suspended globally due to rising costs, and similar concerns have been raised by second-round operators,” Fukurawa said, but added that no developers in later rounds have signalled plans to withdraw.
“We must thoroughly review the system to ensure the second and third rounds are successfully completed,” he said.
The government will keep 20 billion yen ($136 million) in deposits from the Mitsubishi-led groups and bar the companies from bidding in the next offshore wind auction round, he said.
“Japan’s offshore wind market will not collapse due to Mitsubishi’s withdrawal and will remain an important source of renewable energy,” Furukawa said.
($1 = 147.3300 yen)
(Reporting by Yuka Obayashi; Additional reporting by Kentaro Okasaka; Writing by Katya Golubkova; Editing by Edwina Gibbs)
