Japan “fossil fuel dinosaur” launches 20GW global renewables platform

Japan’s largest power company and one of the largest thermal power producers in the world has announced the launch of a major new global renewables business, becoming the latest fossil giant to act on the existential threat of net zero to its business model.

Jera, a joint venture owned by Tepco Fuel & Power and Chubu Electric Power and the largest coal and gas-fired power plant owner in Japan, has been talking up its renewables vision for some time now, while also shifting its thermal generation focus from coal to gas.

Based out of the UK, the new company – called Jera Nex – will be tasked with delivering on Jera’s stated ambition to develop 20GW of renewable capacity by 2035, including through “selective acquisition opportunities” and partnership opportunities, Jera said on Monday.

It starts this journey with the several gigawatts of installed renewables and 10GW development pipeline so far established by Jera, including through last year’s acquisition of Belgian offshore wind outfit, Parkwind.

In a post on LinkedIn on Monday, Parkwind said it was starting a new chapter as part of Jera Nex, where it would build on a “track record of pioneering renewable energy projects with new global reach, scaling the industry to deliver the energy transition.”

In Australia, the Jera-owned Parkwind has teamed up with Beach Energy to bid for a spot in the first round of offshore wind developments proposed for waters off the coast of Victoria.

Parkwind, which has a 75% stake in the Australian offshore wind consortium, says it is planning to bid for offshore licences in other parts of Australia, too.

Climate Energy Finance analysts Tim Buckley and Nishtha Aggarwal last year noted that Jera brings “massive financial capacity and credibility” into the offshore wind equation, despite also continuing to push the “false narrative” that gas is vital to global decarbonisation.

“We … see this move into offshore wind as critically important in building investor confidence and capacity so that Jera and Japan can work to successfully implement its long considered strategic pivot into offshore floating wind in their home market,” the analysts said.

Jera in 2017 took a 10% stake in India renewables firm Renew Power (alongside leading global renewables investors Goldman Sachs, CPPIB and ADIA) and has invested in Taiwan offshore wind (via Formosa 1 & 2) and offshore wind in the UK (Gunfleet Sands), they note.

On the flipside, Jera is also leading Japan’s commercial trials for ammonia blending with coal and contemplating exporting liquid CO2 for CCS offshore to decarbonise LNG.

On balance, however, Buckley and Aggarwal say the transition of another “fossil fuel dinosaur” into offshore wind adds to mounting evidence that they are “belatedly starting to react to the existential threat of net zero to their business models.”

“There is plenty of room to remain hugely skeptical of these climate laggards, but … we may be seeing indications of an important capital shift that signals the first steps away from the industry’s decades-long collective position of climate denialism,” the analysts said.

“We have outlined a vision to reach zero emissions by 2050, and the birth of Jera Nex plays a critical role in our strategic pillars for delivering that ambition,” said Jera global CEO and chair, Yukio Kani, in a statement on Monday.

“Jera Nex will enable us to draw upon expertise from across the world to develop renewable projects, forge partnerships, and build assets that contribute to a future of decarbonised energy with sustainability, affordability, and stability.”

“Our teams have already delivered pioneering offshore wind farms, from the Taiwan Strait to the Belgian North Sea, as well as leading several onshore projects across the world, making Jera Nex well placed to deliver clean energy for a sustainable future,” said Nathalie Oosterlinck, Jera’s head of global renewables who takes up the role of CEO at Jera Nex.