#Japan #JR East #Himeji #Osaka Gas #Hirohata Biomass

Introduction

The Hirohata Biomass Power Plant has recently established a Virtual Power Purchase Agreement (Virtual PPA) with East Japan Railway Company (JR East). This agreement, facilitated through Osaka Gas and its subsidiary Daigas Energy, aims to provide environmental value starting in August 2023 and is expected to play a crucial role in reducing carbon emissions in the region.

Overview of the Virtual PPA

Under the terms of the Virtual PPA, Osaka Gas will purchase the total electrical output and environmental value generated by the Hirohata Biomass Power Plant, located in Himeji City, Hyogo Prefecture. The generated electricity, approximately 530 million kWh per year, will be sold to the Japan Wholesale Electricity Market. In return, JR East will source the environmental value from Osaka Gas, signifying a unique transaction where actual electricity consumption for JR East will still be supplied by its existing retail electricity contracts.

Transition to the FIP System

The Hirohata Biomass Power Plant, which commenced operations under the Feed-In Tariff (FIT) system, will transition to the Feed-In Premium (FIP) system. This change aligns with recent initiatives from Japan's Ministry of Economy, Trade, and Industry to promote the integration of renewable energy into the power market. With this transition, the plant will not only sell electricity but also provide environmental value derived from its output starting in August 2026.

About Hirohata Biomass Power Plant

The Hirohata Biomass Power Plant represents one of the largest biomass-exclusive power generation facilities in Japan, with a generation capacity of approximately 75,000 kW. It utilizes a combination of domestic and imported wood chips, as well as palm kernel shell (PKS) for its fuel. Set to fully operationalize on December 14, 2023, the facility is expected to produce significant amounts of power while aiding in the reduction of carbon emissions. The expected annual contribution is equivalent to a reduction of about 220,000 tons of CO2, constituting roughly 12% of JR East's total emissions.

Companies Involved

• - JR East aims to enhance its environmental performance and innovate value for society as part of its long-term goal, the 'Zero Carbon Challenge 2050', which targets a 50% reduction in CO2 emissions by 2030 compared to 2013 levels and aims for net zero by 2050.

• - Daigas Group (Osaka Gas and Daigas Energy) seeks to realize carbon neutrality by 2050, aiming to contribute to the proliferation of 5 million kW of renewable energy sources domestically and internationally by 2030. This collaboration reflects their commitment to addressing societal issues related to carbon neutrality.

• - Hirohata Biomass Energy Corp. is dedicated to accelerating the transition towards a low-carbon society, leveraging its advanced biomass generation capabilities to produce energy from sustainable sources, and actively working towards achieving carbon neutrality goals.

Conclusion

The establishment of the Virtual PPA between the Hirohata Biomass Power Plant and JR East not only showcases an innovative approach to renewable energy transactions but also highlights the ongoing commitment of key players in Japan's energy sector to contribute significantly to carbon reduction efforts. As initiatives like this gain momentum, the path towards achieving a sustainable energy future looks increasingly promising.