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 of 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 won at auction. This marked the collapse of the first offshore wind project from Japan’s inaugural auction for renewable energy expansion, first held in 2021. Local media referred to this as the "Mitsubishi Shock."

Japan had planned to increase its offshore wind capacity to 10 GW by 2030, but as of March 2026, installed capacity stands at only 0.5 GW. South Korea has also set a target of 14.3 GW by 2030 but currently remains at about 0.3 GW, showing that Japan’s setback is not a distant issue.

Mitsubishi’s stated reason for abandoning the project was rising construction costs. However, the underlying issue was different: the company relied on imports for most of the key equipment, such as turbines.

Mitsubishi pursued aggressive low bids to secure the contracts. However, after the Russia-Ukraine war, inflation and a weaker yen drove import prices sharply higher. GE Vernova, which was to supply the wind turbines, withdrew, and other overseas turbine manufacturers also declined to participate. Mitsubishi explored the possibility of sourcing from South Korea's Doosan Enerbility, but the terms did not match and the deal fell through.

Nihon Keizai Shimbun analyzed that "unlike Europe, Japan’s ability to respond to cost increases was weaker than expected because it cannot produce turbines domestically." The fact that Japan even knocked on Doosan's door is evidence of how rare it is to find companies with indigenous turbine technology in Asia.

Within Japan, voices called for introspection over the lack of a domestic wind power supply chain. Reviving a collapsed supply chain in the short term is not easy. This is an issue South Korea needs to pay attention to now.

According to a joint report published this month by the Renewable Energy Institute of Japan and Aegir Insights, in 2030, the cost of installing offshore wind in Japan is projected to reach 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 single largest factor driving up costs was, without question, turbines.

Turbines account for about 30% of offshore wind investment. In Europe, competition among Vestas (Denmark), Siemens (Germany), and the U.S.'s GE has led to price competition, which in turn has fueled the expansion of the European offshore wind market. In contrast, Japan relies entirely on foreign suppliers for turbines.

It is not that Japan never had its own turbine manufacturers. Mitsubishi Heavy Industries developed wind turbines starting in the 1980s and was producing 2.5 GW-class products by the 2000s, but withdrew from the business following a patent dispute with GE in 2008. Later, in 2014, Mitsubishi formed a joint venture with Denmark’s Vestas, but sold all its shares by 2020.

Hitachi also succeeded in developing a 5 GW turbine, only to withdraw in 2019 after failing to compete with European costs, and Japan Steel Works exited the business the same year. With a complex permitting process delaying the domestic market’s opening, Japanese firms successively collapsed. Similarly, delays in permitting have long been cited as a chronic bottleneck for South Korea’s offshore wind sector, leading to concerns about repeating Japan’s path.

By the time Japan belatedly began scaling up renewable energy in the 2020s, it was already too late. Foreign turbine manufacturers had to develop new models to withstand typhoons and earthquakes, which drove up costs sharply. With no alternatives, Japan had no choice but to accept the higher prices.

Taiwan, another case in Asia, faces a similar situation. As of March this year, Taiwan’s offshore wind capacity stands at 4.5 GW, ranking second in Asia after China, but it has no domestic turbine manufacturers and relies entirely on foreign companies 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 following a WTO complaint from the EU. Now, localization efforts focus on auxiliary equipment such as towers and substructures (BOP). While some substructure suppliers have established themselves, most small and medium-sized companies remain limited to simple assembly and low value-added parts.

Gi Hak Lee, head of wind technology development at Doosan Enerbility, stated, "Turbines are 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 Kunsan National University’s Department of Wind Power Engineering said, "Because Taiwan depends on foreign suppliers for key equipment such as generators, gearboxes, and blades, there is criticism within Taiwan that 'enormous funds have been spent to build wind farms, but there is little real benefit for Taiwan itself.'” According to industry insiders and experts, unless South Korea establishes its own supply chain, it will be difficult to avoid the cost increases experienced by Japan and Taiwan.

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