Japanese companies are dropping out of offshore wind projects in Taiwan, one of fastest growing markets for the technology, as rising costs and worsening delays plunge the industry into deeper trouble worldwide.

Oil refiner Eneos Holdings said last week it may exit the Yunlin Offshore Wind Project in the Taiwan Strait, after regional utility Shikoku Electric Power decided to pull out of the same project due to delays threatening its profitability. Electricity generator Jera announced it completed the sale of its stake in Formosa 3, another Taiwanese offshore wind project, in June.

"The withdrawal of companies indicate that the attractive proposition of Taiwan’s offshore wind is diminishing, which might affect investor confidence in the sector,” said Chenyuan Diao, managing consultant for power and renewables research at Wood Mackenzie.