JERA and Sustech Have Signed an Agreement Related to the Renewable Energy Aggregation Business2022/12/23
JERA Co., Inc. (“JERA”), Japan’s largest energy generator, and Sustech, Inc. (“Sustech”), a “green transformation” technology company, have signed an agreement related to the renewable energy aggregation business.
To accelerate the expansion of renewable energy as part of achieving carbon neutrality by 2050, Japan introduced a Feed-in Premium (“FIP”) scheme in April 2022 that provides power generators a subsidy in the form of a premium when they sell electricity generated from renewable sources on the wholesale electricity market or through bilateral trade.
Because the FIP scheme links the sales price of electricity to the market and adds a premium, power generators have greater incentive to increase supply at times of peak demand than under the existing fixed-price purchase Feed-in Tariff (“FIT”) scheme for renewable energy. On the other hand, because power generators are required to generate electricity in accordance with a planned value based on accurate power generation forecasts, they need to improve their forecast accuracy for renewable energy power generation, which is heavily influenced by weather conditions. In addition, they also need to address market risks and imbalance risks1 by improving profitability through optimal market or bilateral transactions.
JERA, which is moving forward in developing 1 million kW of domestic solar power generation capacity by 2025, and Sustech, which has highly accurate AI-based power generation forecast technology, have decided to leverage their respective strengths to address these challenges by launching a joint renewable energy aggregation business.
Specifically, Sustech will use the solar power generation facilities that it installs and operates to grasp revenue from electricity sales, the premium, and the degree of imbalance risk accompanying power sales in the wholesale market under the FIP scheme while JERA balances power supply and demand and engages in market trading of electricity. In addition, the two companies will seek to further improve forecast accuracy by combining their forecast technologies.
JERA and Sustech aim to further expand the adoption of renewable energy by contributing, through their aggregation business, to greater predictability in renewable energy power generation. Going forward, they will also continue to work together to develop additional renewable energy power generation facilities and to improve and integrate required systems.
JERA is actively working to develop renewable energy, with a target of adding 5 million kW by 2025. Through this business, JERA seeks both to expand renewable energy and to contribute to a stable energy supply as it works to achieve its objective of “JERA Zero Emissions 2050.”
Sustech leverages technology to provide one-stop support, from strategy development to operation, for the “green transformation” of companies and society through corporate environmental measures such as calculating GHG emissions using the CARBONIX decarbonization support platform, proposing reduction measures, and renewable energy power management through the ELIC platform.
1 The difference between planned and actual power generation or between planned and actual power demand.