Japanese electricity utility JERA is looking to sell its stake in the Formosa III offshore wind project amid growing geopolitical risks around the Taiwan Strait, Nikkei has reported.

JERA intends to offload its entire 44% stake in the 2GW offshore project, which is being developed by JERA in partnership with Corio Generation.

Last year, the company informed the Taiwanese authorities of its intent to sell a stake in the Formosa III wind farm, which is located offshore from Changhua in central-west Taiwan.

Although the offshore project has the capacity to generate the same amount of power as two large nuclear facilities, increasing construction costs are expected to reduce its profitability.

The sale price and the buyer are yet to be finalised.

Scheduled to become operational in 2026, Formosa III is expected to require an investment of nearly JPY1tn ($7.6bn).

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Australia’s Macquarie Group holds the remaining stake in the project and is expected to proceed with its development after JERA’s exit.

JERA is currently involved in Formosa I, a 128MW offshore project that has been operational since 2019, and Formosa II, a project with 376MW of capacity scheduled to come online this year.

Formosa II’s development was delayed due to the Covid-19 pandemic, which also impacted its profitability.

JERA primarily operates in thermal power generation and entered the offshore wind segment as part of its decarbonisation move.

In August last year, the company began a subsea ground survey to test whether clean energy could be generated using tension leg platform floating offshore wind turbines in Ishikari Bay, Hokkaido.

The subsea survey is part of the New Energy and Industrial Technology Development Organisation’s (NEDO) Project to Develop Cost-Reducing Technology for TLP Floating Offshore Wind Turbines.

It was launched in partnership with MODEC, Toyo Construction, Furukawa Electric and other companies.