(Text by Observer Network, Liu Bai)
Japan has high hopes for its offshore wind power industry, but there are now negative developments. According to a recent report by the Japan Economic News, British energy giant BP is considering withdrawing from an offshore wind power project near the coast of Yamagata Prefecture in northern Japan. Although the project is expected to continue, if BP actually withdraws, it will become the first company to withdraw from the third round of offshore wind power bidding in Japan. This will further highlight the real challenges faced by Japan’s offshore wind power development, including high costs and uncertain profitability.
Multiple sources informed that BP has been in talks with other members of the consortium regarding potential withdrawals. However, BP’s UK headquarters responded to the Japan Economic News by stating that no final decision has been made, and no agreements have been reached.
The Yuzo Town, Yamagata Prefecture offshore wind power project is led by Maruhiko, with the participation of Kansai Electric Power, Tokyo Gas, local construction company Maruoka, and BP. In December 2024, this consortium won the third round of public bidding for large-scale offshore wind power projects by the Japanese government. In November 2025, the project's detailed plan for wind turbine construction was announced, with plans to commence operations in June 2030.
Japan Akita Prefecture Offshore Wind Power Facilities IC Photo
According to reports, BP holds approximately 25% of the equity in the project development company, which is comparable to Kansai Electric Power’s shareholding. It is second only to Maruhoko. If BP withdraws from the project, its shares are expected to be taken over by other members of the consortium. Therefore, the project itself is expected to continue progressing.
Sources say that BP is considering exiting its global offshore wind power business in connection with restructuring.
In August 2025, BP merged its global offshore wind power business with JERA, Japan's largest thermal power generation company, forming the joint venture company JERA Nex bp, each holding a 50% share. However, the Yamagata project received development rights before the merger took place. It was managed by BP's UK headquarters, and did not successfully integrate into the new company's business structure.
Reports indicate that BP believes it is difficult to proceed with this project independently, so they tend to withdraw from it. However, in the future, they will still participate in other offshore wind power projects in Japan through JERA Nex bp.
In recent years, the development of offshore wind power in Japan has faced several setbacks.
In August 2025, a joint venture company formed by Mitsubishi Corporation and Chubu Electric Power announced its withdrawal from three offshore wind power projects in Chiba Prefecture and Akita Prefecture. These projects had won bids in the first round of large-scale offshore wind power tenders organized by the Japanese government. However, due to a significant increase in construction costs, the company decided to abandon the development of these projects.
Just last month, Norwegian energy giant Equinor also announced its withdrawal from the Japanese market. Although the company has not yet launched any specific projects in Japan, it has abandoned further expansion efforts there. The Nikkei Business News believes that the same reason behind this decision is a lack of confidence in the future profitability of future projects.
The Japanese government has always regarded offshore wind power as an important means to achieve energy transformation.
According to the latest version of the ‘Energy Basic Plan’, Japan plans to increase the proportion of wind power generation in the national power supply structure from 1.1% in the fiscal year 2023 to 4% to 8% by the fiscal year 2040. As there is less and less land suitable for onshore wind power generation, offshore wind power has received greater expectations.
However, among the 9 offshore wind power development areas for which the Japanese government has completed bidding, 3 projects in which Mitsubishi Corporation’s consortium won the bid have now withdrawn and bidding has been restarted. If BP ultimately withdraws from the Yamagata project, it will become the first case of a winning bidder withdrawing from one of the remaining 6 projects.
Currently, some offshore wind power projects in Japan are developed with the participation of foreign investors. Examples include the ENEOS Akita offshore project involving Spanish company Iberdrola, and the Mitsui & Co. Niigata offshore project co-funded by German company RWE.
Reports indicate that if more foreign companies choose to withdraw in the future, Japanese companies will have to bear greater financial pressures. Whether some projects can continue to be advanced may also require re-evaluation.
The challenges faced by Japan's offshore wind power industry have also attracted official attention. The Ministry of Economy, Industry and Communications outlined in its reform document for offshore wind power systems that as of the end of 2025, the prices of steel and wind turbines have been rising continuously. Coupled with factors such as the depreciation of the Japanese yen and global supply chain tensions, the development costs for projects have significantly increased. As a result, the revenue estimates for many winning projects have changed.
To prevent companies from abandoning projects due to cost pressures, the Japanese government subsequently adjusted the maritime wind power bidding system, improved the price adjustment mechanism, and allowed developers to modify project plans under certain conditions, in order to stabilize companies' investment intentions.
