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Eneos Holdings has cautioned that rising costs are affecting the profitability of its offshore wind projects in Japan. Its 375 MW Happo-Noshiro project, developed with Iberdrola and Tohoku Electric, is scheduled to start construction next year, with operations set for 2029. Cost pressures are widespread, with other developers like Mitsubishi and Mitsui & Co. citing high expenses. Japan is pushing to expand offshore wind capacity to 10 GW by 2030 and 45 GW by 2040 to enhance energy security and promote clean energy.
Japan?s leading oil refiner, Eneos Holdings, which has been steadily expanding into renewable energy, has raised concerns over the rising costs of its offshore wind projects. The company?s CEO highlighted that achieving expected returns has become increasingly challenging. Advertisement
Eneos? renewable unit, Japan Renewable Energy, secured a government auction earlier this year to develop the 375-megawatt Happo-Noshiro offshore wind project in Akita prefecture, in partnership with Spain?s Iberdrola and Tohoku Electric Power. Construction is planned for next year, with the project expected to begin operations by 2029.
Eneos CEO Tomohide Miyata said that while the company has not made any firm decisions about delaying or halting the project for a few years, the surge in project costs has outpaced green electricity prices, making the financial returns harder to achieve. He confirmed that there are no significant changes to the current development plan.
The cost pressures on Japan?s offshore wind sector are not unique to Eneos. In August, a Mitsubishi-led consortium withdrew from three offshore wind projects awarded in 2021, citing high expenses. This move prompted the government to discuss additional support measures with remaining developers to maintain the sector?s momentum.
Mitsui & Co., in collaboration with Germany?s RWE and Osaka Gas for a 684 MW project in Niigata prefecture, also highlighted rising costs last week but noted ongoing talks with the government to manage these challenges.
Japan aims to expand its offshore wind capacity to 10 gigawatts by 2030 and 45 gigawatts by 2040 to strengthen energy security and promote cleaner electricity. Three major government auctions have been held so far to support this goal.
Other projects are progressing as well. Japan?s Electric Power Development (J-Power), working with JERA, Itochu, and Tohoku Electric, is developing a 315 MW offshore wind project in Akita, targeting operational status by 2028, according to J-Power?s president.
Source Reuters
5th Jun, 2025
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