Mitsubishi-led consortia won Japan’s 2021 offshore wind auctions for 1.76GW. Credit: fokke baarssen/Shutterstock.

Japan-based Mitsubishi Corp has recorded an impairment charge [a reduction in or total loss of the recoverable value of an asset] of Y52.2bn ($342.4m) on its offshore wind projects in Japan.

The impairment, recorded over the nine months ending December 2024, has prompted a thorough review of the company’s business plans for these projects.

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“We are currently reviewing the business plans for the related projects and will announce the appropriate next steps in due course,” the company stated in its earnings presentation for the third quarter (Q3) of the financial year 2024 (FY24).

Mitsubishi leads consortia which won Japan’s first state-run offshore wind auctions in 2021, securing three projects with a combined 1.76GW capacity, originally set for operation between 2028 and 2030.

The company is reassessing the viability of these projects in light of a “significantly changed” business environment, indicative of the global rise in offshore wind project costs.

Rising costs, supply chain disruptions and higher interest rates, exacerbated by Russia’s war in Ukraine, have led Mitsubishi to reassess the projects, according to reports from Reuters.

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Mitsubishi reported a 19% increase in net profit for the nine months to December 2024, reaching Y827.4bn, buoyed by its liquefied natural gas operations and asset sales. The company has maintained its full-year profit forecast at Y950bn.

Japan has conducted three offshore wind auctions to date, attracting winners such as RWE, Iberdrola and BP.

In response to escalating costs, the government recently modified some auction rules.

 Mitsui, which won rights to develop an offshore wind farm in partnership with others in 2023, also acknowledged the difficulties posed by rising construction costs and currency fluctuations but remains committed to the sector.