Japan's Octopus Energy unit aims to increase renewables in energy source mix
10/04/2023 12:45
By Katya Golubkova and Yuka Obayashi
TOKYO, April 10 (Reuters) - The Japanese arm of British
energy supplier Octopus Energy aims to add more renewable energy
to its supply mix because it provides a more stable purchasing
price compared with the liquefied natural gas it now relies on,
its local head said.
Octopus Energy entered the Japanese market in late 2020,
launching a joint venture with the country's leading energy
company Tokyo Gas 9531.T , and the venture now has around
160,000 customers.
To provide power to Japanese households, Octopus Energy
currently relies on Tokyo Gas for electricity, and nearly 80% of
that comes from LNG-fired power generation, Hajime Nakamura, the
chief executive of TG Octopus Energy in Japan, told Reuters.
"We want to expand our direct access to renewable power as a
source of our electricity," he said, noting that the price of
power from renewable energy is more stable than that derived
from fossil fuel sources.
"We want to look into more PPAs (power purchase agreements)
with renewable energy sources going forward."
Last week, Octopus Energy's generation arm invested in
Japanese solar power developer Yotsuya Capital, and Nakamura
believes offshore wind power could also be added to Octopus'
procurement portfolio via partnerships with offshore wind
suppliers.
"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," he 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."
Octopus Energy does not plan to take part in Japan's public
auctions for offshore wind power projects as it is focusing on
supplying power rather than producing it, Nakamura said.
Tokyo Gas also provides the joint venture with working
capital which covers the acquisition costs of attracting new
clients - something Nakamura said should change when the number
of customers reaches 1 million, a target set for 2026.
"Once our customer base reaches 1 million, we will be able
to make our business profitable," he said, noting that the
profit margins from existing customers would then exceed
acquisition costs and the venture would be able to start
repaying its loans to Tokyo Gas.
He declined to say how much working capital it had received
from Tokyo Gas.
(Reporting by Katya Golubkova and Yuka Obayashi)
((ekaterina.golubkova@thomsonreuters.com;))