Tokyo, Aug. 27 (Jiji Press)—Mitsubishi Corp. and Chubu Electric Power Co. said Wednesday that they will pull out of offshore wind power projects in three areas of Japan.

Following a reassessment of the projects conducted in light of soaring construction materials costs and rising interest rates, “we have determined that establishing a viable business plan is not feasible given the current conditions,” Mitsubishi, a major Japanese trader, said in a statement.

With the Japanese government viewing offshore wind power generation as an integral part of its decarbonization efforts, the two firms’ latest decisions may prompt the government to revise its energy strategy.

In 2021, a consortium led by Mitsubishi and Chubu Electric successfully bid for the government-led projects to build wind power plants in three areas off the northeastern prefecture of Akita and Chiba Prefecture, east of Tokyo. The power plants were supposed to begin operations in stages from 2028.

At a press conference in Tokyo on Wednesday, Mitsubishi President Katsuya Nakanishi said that construction costs for the projects have more than doubled from the trading house’s initial estimates, mainly due to soaring materials prices.

[Copyright The Jiji Press, Ltd.]