Shizen Energy signs Virtual PPA with Microsoft

Shizen Energy has signed a 20-year virtual power purchase agreement (VPPA) with Microsoft to provide renewable energy from a 25MWac solar farm in Inuyama City, Aichi Prefecture. The VPPA represents a long-term commitment similar to other power purchase agreements (PPAs). This is Microsoft’s first PPA in the country, contributing to clean energy for the electricity grid, and supports Microsoft’s goals of achieving 100% renewable energy by 2025. 

JUWI Shizen Energy Inc. (JSE) is currently constructing the 25 MWac solar power plant in Inuyama City, Aichi Prefecture, which will be the largest single asset solar power plant contracted under a virtual corporate PPA in Japan to reach financial close. 

The development and construction of the project has been financed by non-recourse finance in the amount of 10.9 billion yen from Societe Generale. This is the first case of non-recourse project finance being used for the combination of a VPPA in Japan for the sale of non-fossil fuel certificates (NFCs) and long term contracted electricity sales including balancing.

Toshiba Energy Systems & Solutions Corporation (Toshiba ESS) will manage the electricity from a solar power plant developed and operated by Shizen Energy in Inuyama City, Aichi prefecture by selling the power to the market as an aggregator. Under this contract, the company will prepare and submit power generation forecasts and generation plans, and will also bear the imbalance risk in the event of a difference between planned and actual results.

For Shizen Energy, this is the first project in Japan financed by an international lender.

Shizen Energy will be responsible for overall coordination, financing, and asset management of the project, while JSE will be in charge of development and EPC, and JUWI Shizen Energy Operation Inc. will conduct O&M. This project is a major accomplishment for the Shizen Energy Group, which provides seamless, integrated solutions for renewable energy power plants.

“Shizen Energy’s expertise and presence in the Japanese market is enabling our first renewable energy purchase in Japan and it’s great to see near-term supply for our 100% renewable energy goal.” said Adrian Anderson, General Manager, Renewable and Carbon Free Energy at Microsoft. “A commercial structure like this is important to promoting grid decarbonisation in the country.”

Cedric Chatel, Managing Director, Energy + Group at Societe Generale said, “With our knowledge of renewable asset classes in Japan and corporate PPA financings in the other energy markets, Societe Generale can capitalise on our expertise in designing and implementing an innovative first-of-a-kind financing for the benefit of Shizen Energy. We appreciate the trust that Shizen Energy have placed in us and the opportunity to have contributed to this landmark milestone for financing the energy transition in Japan”

Oliver Senter, Executive Officer of Shizen Energy responsible for Investment & Strategy said “The Inuyama project represents the strongest elements of Shizen Energy Group, from years of local development through to construction, and also PPA arrangement with an innovative and international financial scheme. We look forward to enabling more projects with a similar structure as we increasingly focus on PPA projects to support our customers to decarbonise in Japan, Asia and the Americas.”

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