Tokyo Gas has signed a 25-year power purchase agreement to procure electricity and environmental attributes from a 54.6-megawatt (MW) onshore wind farm in southwestern Japan, as the country’s biggest city gas supplier expands its renewable power business in a market racing to add more domestic clean energy.
The company said last week it had agreed to buy power and environmental value from the Reihoku-Amakusa wind project, which is under construction in Kumamoto prefecture by Reihoku Wind, a company backed by Japanese renewable energy developer Renova, SMFL Mirai Partners and NCS RE Capital.
Tokyo Gas, a major liquefied natural gas buyer and electricity retailer as well as Japan’s largest city gas provider, has been trying to build out renewables as the country pushes to cut emissions, reduce its dependence on imported fossil fuels and secure more domestic power supplies after years of fuel price volatility.
The company said in 2023 it planned to spend JPY200 billion (US$1.4 billion) over three years to expand renewable power assets at home and abroad to 6 gigawatts (GW) by 2030, from 1.5 gigawatts GW, with offshore wind among its target growth areas.
The Reihoku-Amakusa plant will comprise 13 Vestas wind turbines, each with a capacity of 4.2 MW, for total installed capacity of 54.6 MW. It is expected to generate about 109,000 megawatt-hours of electricity a year, equivalent to the annual power consumption of roughly 25,000 households, and is scheduled to start operations in 2027.
Under the offsite power purchase agreement, Tokyo Gas will purchase both the electricity generated by the project and its environmental attributes, then supply the power to customers through its retail electricity business.
The agreement comes as Japan seeks to raise the share of renewables in its electricity mix to 40 to 50 per cent by 2040, from 22.9 per cent in 2023, under its latest energy strategy.
But that transition has been complicated by rising costs for offshore wind projects, grid constraints, and growing renewable curtailment in some regions, increasing the importance of long-term procurement deals that can support new solar, wind and storage capacity.
For utilities and corporate power suppliers, such contracts are becoming an increasingly important route to securing clean electricity outside Japan’s traditional subsidy-based renewable support schemes.
Wind power may be particularly attractive because it can generate at night, when solar output is unavailable, helping retailers diversify their supply profiles and better match clean power procurement with demand.
The deal is one of the first concrete projects under a capital and business alliance signed by Tokyo Gas and Renova in April 2024. The two companies have said they will also explore Tokyo Gas participation in other domestic onshore wind projects under development by Renova, including through investment and joint development, while expanding cooperation in renewable energy.
Tokyo Gas and Renova said the wind project would support the supply of renewable electricity to end-users through Tokyo Gas’s retail power business.
