Global Offshore Wind Challenges Are Hitting Japanese Operators

Article content

(Bloomberg)-Japanese wind developers abroad face the same pressures related to the cost that led to the sector’s cavity worldwide, which deals with the ambition of the poor nation of promoting renewable energy.

Article content

Article content

Mitsubishi Corp. Loss of 52.2 billion yen (343 million dollars) in its local work to generate wind energy abroad for a quarter. Its president, Katsuya Nakanychi, said on Thursday that the Russian invasion of Ukraine, that the changes in providing supply and inflation chains and the continuous economic effects of the epidemic had all effect.

Article content

The Trade House, which won the rights to develop and operate three projects for foreign winds as part of a consortium in 2021, announced earlier this week that it will review the pledges, noting the challenges of macroeconomic economics such as high interest rates and the cost of supplies. It is the latest Japanese company to embody the difficulties of the renewed sector.

“We are discussing and comprehensive investigations to consider measures, including treatments,” Nakanychi said, adding that the company will explain the results of the review at another time.

Repeated costs and delays have exceeded the wind industry in recent years. The Orsted A/S in Denmark became a major example of this problem, as it recorded $ 1.7 billion on its profits last month, while Oil Major BP PLC has merged its marine wind business with Japan’s main benefit to reduce exposure.

These obstacles do not reap any nation, including Japan, a gas -based G7 economy that urgently needs to enhance renewable energy in the energy mix to achieve climate goals. Trading companies, which have traditionally invested in fossil fuel projects abroad, have turned into renewable energy sources such as marine winds to pressure unbeatable energy projects. The country aims to obtain 10 GB of allocating marine wind capacity by 2030 and increasing this to 30 to 45 GB by 2040.

Article content

But the winds constituted only 1.1 % of the country’s energy mix in 2023, according to the latest data from the Ministry of Commerce. An analysis conducted by the Ministry of Commerce found that the cost of steel – a major component of external structures – has doubled between 2018 and 2024, while the cost of cables increased by more than 80 %. Cocapa Otta, a Bloombernel analyst, said the weakest yen also adds to the cost.

Mitsubishi’s peers face similar challenges. Chubu Electric Power Co. , That works with Mitsubishi to develop projects, a loss of 17.9 billion yen related to power generation abroad, according to a statement issued on Monday.

“We see a position in which we have to retreat,” Masome Kacinoki, President of Marubini, said at a press conference on Wednesday. The company was part of a consortium chosen in December to develop a project in the Yamagata Province in Japan.

The financial managers at Mitsui & Co. Tetsuya Shigeta also that the company faces challenges such as high construction fees and volatility in exchange rates. The company was chosen, along with RWE and Osaka Gas in Germany, in 2023 to develop a project in Niigata.

Article content