Shizen Energy Inc. has made a significant move in the renewable energy sector by entering into a 20-year virtual power purchase agreement (VPPA) with Microsoft. This agreement allows Shizen Energy to supply renewable energy generated from a 25MWac solar farm in Inuyama City, Aichi Prefecture, marking Microsoft’s first venture into power purchase agreements in Japan. The VPPA serves as a long-term commitment and played a pivotal role in facilitating the financial close of the Inuyama project. It is also aligned with Microsoft’s commitment to achieving 100% renewable energy usage by 2025.
The solar power plant in Inuyama, currently under construction by JUWI Shizen Energy Inc., is a significant endeavor. This 25 MWac facility will be the largest single asset solar power plant in Japan to reach financial close under a virtual corporate PPA. Its operations are scheduled to commence in December 2023.
The development and construction of the project were funded through non-recourse finance of 10.9 billion yen from Societe Generale, a landmark move in Japan’s renewable energy landscape. Toshiba Energy Systems & Solutions Corporation will manage the electricity distribution and market sales, taking responsibility for balancing operations.
For Shizen Energy, this marks the first project in Japan financed by an international lender, highlighting the growing global interest in Japan’s renewable energy market.
Shizen Energy Group will oversee the coordination, financing, and asset management of the project, with JSE handling development and EPC, and JUWI Shizen Energy Operation Inc. managing operations and maintenance. Microsoft’s Adrian Anderson expressed enthusiasm for the collaboration, highlighting its role in promoting grid decarbonization in Japan.
Cedric Chatel of Societe Generale noted the innovative nature of this financing arrangement, underscoring its contribution to Japan’s energy transition. Shizen Energy’s Oliver Senter emphasized the significance of this project and expressed eagerness to pursue similar structures to support decarbonization initiatives not only in Japan but also in Asia and the Americas.
