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British energy supplier, Octopus Energy, is looking to ramp up its renewable energy supply mix in Japan. The company entered the Japanese market in late 2020 via a joint venture with Tokyo Gas and has garnered approximately 160,000 customers.
The energy supplier currently relies on Tokyo Gas for electricity. About 80% is sourced through liquefied natural gas (LNG)-fired power generation.
However, the company’s Japanese arm plans on adding more renewable energy to its procurement portfolio, as the purchasing price of renewable power is stable compared to LNG, as stated by Hajime Nakamura, the CEO of TG Octopus Energy in Japan.
The energy supplier aims to source renewable power directly and expand access to renewable energy as a source of their electricity.
Last week, its power generation arm, Octopus Energy Generation, invested in Yotsuya Capital, a leading Japanese solar power developer.
Partnerships with offshore wind suppliers could give Octopus another renewable bump in Japan.
"In terms of the renewable energy currently developed in Japan, the majority is solar ... so solar is the most easily accessible power generation at this time," Nakamura said.
"But going forward, we expect offshore wind power development will accelerate, so our potential future deals (for sourcing power) will obviously be offshore wind power."
According to Nakamura, Octopus Energy plans to refrain from taking part in Japan's offshore wind power projects' public auctions; this is because the company focuses on supplying power rather than producing it.
Tokyo Gas also provides capital covering new client acquisition costs through the joint venture.
When one million clients have been onboarded, the company's profit margins will exceed acquisition costs, allowing the joint venture to start repaying its loans to Tokyo Gas.
Nakamura declined to disclose the total amount received by his company from Tokyo Gas as working capital.
Octopus Energy is expanding its renewable energy supply mix in Japan due to its stable purchasing price compared to LNG. It aims to source renewable power directly through partnerships with suppliers, focusing on offshore wind power.
The energy supplier plans to refrain from participating in the public auctions of offshore wind power projects in Japan as it focuses on supplying power instead of producing it.
By Michael Kern for Oilprice.com
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Michael Kern is a newswriter and editor at Safehaven.com and Oilprice.com,