- Mitsubishi Corporation is abandoning three major offshore wind projects in Japan after costs more than doubled, making them financially unviable.
- The company's CEO stated that investment recovery was impossible, leading to hundreds of millions in losses.
- This situation reflects a global trend, with major offshore wind projects being cancelled in the U.S. and Europe due to soaring costs.
- The true cost of offshore wind is much higher than often reported when factoring in grid expansion and backup power for intermittency.
- Japan continues to pursue aggressive offshore wind targets despite these fundamental economic flaws, treating corporate withdrawals as temporary setbacks.
The green energy fantasy is collapsing in real time, and Japan's latest disaster should serve as a global warning.
Mitsubishi Corporation, one of Japan's most powerful industrial giants, is abandoning three massive offshore wind projects after admitting the numbers simply do not work. This corporate retreat exposes the harsh truth that renewable energy projects were never economically viable without massive government life support and taxpayer subsidies.
Mitsubishi's decision to withdraw from projects in Akita and Chiba prefectures marks a stunning reversal. The consortia had won these sites in 2021 with remarkably low bids of 8 to 11 cents per kilowatt-hour, hailed as proof of Japan's renewable ambition. But reality proved harsh. Soaring costs for steel, turbines, and logistics, combined with a weakening yen and rising interest rates, made continuing impossible.
The crushing weight of reality
Mitsubishi Chief Executive Katsuya Nakanishi delivered the fatal diagnosis. "We thoroughly examined every possible measure, but compared to our bidding assumptions, costs more than doubled, making even investment recovery impossible," he told a briefing. The company had already logged a staggering 52.2 billion yen ($354 million) in impairment losses on these projects. Even with potential government help to receive higher power prices, the economic case had collapsed.
This pattern is repeating around the world. On the U.S. East Coast, Ørsted cancelled two large projects in New Jersey, absorbing billions in losses. BP and Equinor abandoned contracts in New York after costs rose by 40% beyond estimates. In Europe, Vattenfall halted its Norfolk Boreas project citing a 40% cost increase. Market signals are screaming that offshore wind is economically unsustainable.
The full cost deception
The debate often centers on the Levelized Cost of Electricity, which narrowly focuses on generation costs. However, this metric ignores the broader economic realities captured by the Full Cost of Electricity. When including backup power for intermittency, grid expansion, subsidies, and decommissioning costs, offshore wind's true price becomes clear.
Offshore wind's LCOE is around 12 to 16 cents per kilowatt-hour, but when the full cost of electricity is considered, it rises to 20 to 30 cents per kilowatt-hour. Nuclear and gas remain much lower, at roughly 12 to 14 cents and 10 to 12 cents respectively. Japan continues to highlight falling LCOE while downplaying FCOE, creating an illusion of competitiveness that misleads policymakers and taxpayers.
Despite these failures, Japan continues pursuing 45 gigawatts of offshore wind capacity by 2040. The policy has become entrenched, treating corporate withdrawal as a temporary setback rather than evidence of fundamental flaws. Offshore wind has effectively become a new type of public works project where ports, construction companies, and trading houses benefit from government support.
The global green energy push was never about true sustainability or affordability. It was about corporate welfare and political control, creating dependency on government subsidies while delivering unreliable energy. Japan's experience demonstrates how energy policy drifts into selective cost reporting, technological optimism, and entrenched interests that ignore economic reality.
Mitsubishi's retreat proves that even industrial giants cannot overcome flawed policy frameworks. If Japan, with its formidable industrial base, struggles to make offshore wind viable, every nation should take notice. The renewable energy revolution is collapsing under the weight of its own economic contradictions, and the world cannot afford to ignore the warning signs any longer.
Sources for this article include:
Please contact us for more information.