Foreign investments are fleeing one after another; Japan's much-anticipated offshore wind power project is now completely dead.
Latest news: British energy giant BP is considering pulling out of its offshore wind project in Yamagata Prefecture, Japan. If confirmed, this would be the first major company to abandon a project midway through Japan's third round of wind power tenders.
This isn't an isolated incident—it's a wave of mass withdrawals and collective pessimism.
Last month, Norway’s top energy firm Equinor directly announced a full exit from the Japanese market, completely abandoning its plans. Earlier, Japan’s domestic giant Mitsubishi Corporation abruptly dropped three large offshore wind projects it had already won bids for, choosing to take financial losses rather than continue.
For both foreign and local companies to flee en masse isn’t accidental—it’s simply unprofitable.
Japan’s offshore wind power looked promising on paper, with hopes pinned on it driving energy transition and increasing power generation share. But reality has been harsh: steel and turbine costs have skyrocketed, compounded by yen depreciation and supply chain bottlenecks, causing project costs to double. Add in overly aggressive bidding during initial auctions that locked in low electricity prices, and developers are now losing money with every passing day—this is pure loss-making business.
Even more telling, BP isn’t leaving Japan entirely—it’s just shedding this unprofitable project. This is essentially capital voting with its feet: the Japanese wind market carries high risks, offers thin margins, and has extremely poor cost-performance ratio.
Even as the Japanese government hastily revised rules, adjusted pricing, and relaxed policies in a desperate attempt to rescue the market, it failed to regain investor confidence.
In short, today’s Japanese offshore wind power has transformed from a "promising sector" into a "big pit to avoid at all costs" for industry giants. Foreign investors are gradually withdrawing, domestic companies dare not invest—Japan’s grand energy transition plan is likely to collapse entirely.
Original article: toutiao.com/article/1869961944609800/
Disclaimer: The views expressed in this article are those of the author.