Mitsubishi Corp. announced it took an impairment loss of 52.2 billion yen on its domestic offshore wind projects during the nine-month period ending in December. The firm leads a consortium that won Japan’s initial state-run wind auctions in 2021, securing the rights to develop three offshore wind farms with a combined capacity of 1.76 gigawatts, expected to begin operations between 2028 and 2030. However, the company is now re-evaluating the project timelines and construction details in light of significant changes in the global business landscape.
This re-examination comes as external pressures—such as the consequences of Russia’s war on Ukraine, rising global costs, supply chain disruptions, and increasing interest rates—have dramatically altered the economic environment for offshore wind developments. During a recent briefing, Mitsubishi’s chief executive, Katsuya Nakanishi, emphasized that the delivery date and commencement of construction could not be confidently projected at this time. Mitsubishi’s partner, Chubu Electric Power, also disclosed an 18 billion yen charge on these projects.
Despite the challenges faced with its offshore wind initiatives, Mitsubishi reported a 19% increase in net profit over the nine-month period, reaching 827.4 billion yen, thanks largely to gains from its liquefied natural gas business and asset sales. The company retained its forecast of 950 billion yen for the full fiscal year ending in March. Concurrently, other players in the market, including Mitsui and international entities like RWE, Iberdrola, and BP, are experiencing similar hurdles amid rising construction costs and exchange rate fluctuations, revealing the broader impact of global market shifts on the offshore wind industry.