Microsoft has signed a Power Purchase Agreement (PPA) to procure solar power in Japan.

Shizen Energy Inc. last week announced it has signed a 20-year virtual VPPA with the cloud company to provide renewable energy from a 25MWac solar farm in Inuyama City, Aichi Prefecture.

Shizen Energy Inuyama Solar Japan
– Shizen Energy

This is Microsoft’s first PPA in Japan; Shizen said the deal was “instrumental” in helping achieve financial close on the Inuyama project.

“Shizen Energy’s expertise and presence in the Japanese market is enabling our first renewable energy purchase in Japan and it’s great to see near-term supply for our 100 percent renewable energy goal,” said Adrian Anderson, general manager, renewable and carbon-free energy at Microsoft. “A commercial structure like this is important to promoting grid decarbonization in the country.”

JUWI Shizen Energy Inc. is currently constructing the solar farm outside Nagoya, which Shizen said will be the largest single-asset solar power plant contracted under a virtual corporate PPA in Japan. The plant is scheduled to start operation in December 2023.

Oliver Senter, executive officer of Shizen Energy responsible for investment & strategy said: “The Inuyama project represents the strongest elements of Shizen Energy Group, from years of local development through to construction, and also PPA arrangement with an innovative and international financial scheme. We look forward to enabling more projects with a similar structure as we increasingly focus on PPA projects to support our customers to decarbonize in Japan, Asia, and the Americas.”

The development and construction of the project have been financed by non-recourse finance in the amount of 10.9 billion yen from Societe Generale. Toshiba Energy Systems & Solutions Corporation (Toshiba ESS) will manage the electricity from the plant.

Cedric Chatel, managing director, energy + group at Societe Generale, added: “With our knowledge of renewable asset classes in Japan and corporate PPA financings in the other energy markets, Societe Generale can capitalize on our expertise in designing and implementing an innovative first-of-a-kind financing for the benefit of Shizen Energy. We appreciate the trust that Shizen Energy has placed in us and the opportunity to have contributed to this landmark milestone for financing the energy transition in Japan.”

Founded in June 2011, Shizen Energy’s business includes the development, financing, and asset management of renewable energy power plants using solar power, wind power, small-scale hydroelectric power, and biomass.

Microsoft originally launched its azure cloud in Japan in 2014 with two data centers - one, Japan East, in the Saitama Prefecture near Tokyo; and the other, Japan West, in the Osaka Prefecture.

PPAs are less common in Japan than in the US or Europe, but Amazon has previously signed a 22MW deal with Mitsubishi and a 38MW deal with Itochu to power its operations in the country.