Japan's Reliance on Foreign Turbines... Even the "Wind" Has Stopped [Seeking the Path to Wind Power Independence] ③

Mitsubishi’s Surprise Withdrawal from Offshore Wind Projects in August Last Year
Rising Construction Costs... Fundamental Issue: Lack of Domestic Turbines
Absence of Market Drives Japanese Turbine Manufacturers Out of Business
Taiwan, a “Le

Panoramic view of a Japanese offshore wind farm. Source: Pixabay

In August last year, Mitsubishi of Japan abruptly withdrew from three offshore wind power projects with a combined capacity of 1.7 gigawatts (GW), which they had previously won in an auction. This marked the collapse of the first project from the inaugural offshore wind power auction held by Japan in 2021 as part of its renewable energy expansion efforts. Local media called this the "Mitsubishi Shock."

Japan had planned to increase its offshore wind power capacity to 10 GW by 2030. However, as of March 2026, the installed capacity stands at just 0.5 GW. Similarly, South Korea has set a target of 14.3 GW by 2030 but is currently at only around 0.3 GW, making Japan’s setbacks highly relevant for Korea as well.

The official reason cited by Mitsubishi for abandoning the project was rising construction costs. However, the underlying issue was different: most of the key equipment, such as turbines, had to be imported.

Mitsubishi bid aggressively low prices to secure the projects. However, after the outbreak of the Russia-Ukraine war, inflation and the weakening yen caused import prices to soar. GE Vernova, which was supposed to supply the wind turbines, withdrew from the deal, and other foreign turbine companies also declined to participate. Mitsubishi explored the possibility of sourcing from Doosan Enerbility of South Korea, but the terms did not align, and the deal fell through.

Nihon Keizai analyzed that, "Unlike Europe, Japan’s ability to cope with costs was weaker than expected because it could not produce turbines domestically." The fact that Japan knocked on Doosan’s door highlights how rare it is for an Asian company to possess its own turbine technology.

Within Japan, there has been a wave of self-reflection regarding the lack of a domestic wind power supply chain. Once a supply chain collapses, it is not easy to rebuild it in a short period of time. This is something Korea should pay close attention to right now.

According to a joint report published this month by the Renewable Energy Institute of Japan and Aegir Insights, the cost of installing offshore wind power in Japan in 2030 is projected to be 3.71 million euros (about 6.7 billion won) per megawatt, about 21% higher than Europe’s 3.22 million euros (about 5.5 billion won). The primary cause of rising costs was, by far, the turbine.

Turbines account for about 30% of offshore wind power investment costs. In Europe, competition among Denmark’s Vestas, Germany’s Siemens, and the entry of GE from the United States has fostered price competition, fueling the expansion of the European offshore wind market. In contrast, Japan remains structurally dependent on foreign turbines.

Japan did not lack its own turbine companies from the start. Mitsubishi Heavy Industries had developed wind turbines since the 1980s, producing products up to 2.5 GW-class in the 2000s, but exited the business after a patent lawsuit with GE in 2008. Later, in 2014, it formed a joint venture with Denmark’s Vestas, but transferred all its shares in 2020.

Hitachi succeeded in developing a 5 GW turbine but withdrew in 2019 after losing out to European cost competition, and Japan Steel Works also exited the market in the same year. As domestic licensing and regulatory hurdles delayed the market opening, Japanese companies collapsed one after another. Delays in permitting have also been a chronic bottleneck for offshore wind power in South Korea, raising concerns that Korea may follow the same path as Japan.

By the time Japan belatedly accelerated its renewable energy expansion in the 2020s, it was already too late. Foreign turbine companies had to develop new models tailored to withstand typhoons and earthquakes, which significantly drove up costs. With no alternatives, Japan had no choice but to accept these higher prices.

Taiwan, another case in Asia, is facing a similar situation. As of March this year, Taiwan’s offshore wind power capacity stood at 4.5 GW, ranking second in Asia after China, but due to the lack of domestic turbines, it is entirely dependent on foreign suppliers such as Siemens.

At one point, Taiwan tried to foster its domestic supply chain through Local Content Requirements (LCR), but these were abolished in 2024 after an EU WTO complaint. Currently, Taiwan supports localization efforts mainly for towers, substructures, and other balance-of-plant (BOP) components. While some substructure companies have established themselves, most small and medium-sized enterprises remain limited to simple assembly and low-value-added parts.

Gi Hak Lee, Head of Wind Power Technology Development at Doosan Enerbility, stated, "The turbine is the starting point for all research and development (R&D). Without turbines, it is impossible to develop design and engineering capabilities."

Professor Sangil Lee of Gunsan National University’s Department of Wind Engineering commented, "Because Taiwan relies on foreign suppliers for critical components such as generators, gearboxes, and blades, there is criticism within Taiwan that, despite investing huge sums to build wind farms, there is little benefit to the country." According to industry experts, unless South Korea can establish its own supply chain, it will be difficult to avoid the same cost increases experienced by Japan and Taiwan.

This content was produced with the assistance of AI translation services.