Introduction
The increasing awareness of climate change and the global commitment to reduce carbon emissions have led to an upsurge in the adoption of renewable energy sources. Among these sources is the corporate power purchase agreement (PPA), which enables companies to purchase renewable energy directly from a power generator. In this article, we will discuss the KURAKEN PPA Business Challenge, a proposed business model that seeks to generate solar power in Ibaraki Prefecture, Japan, and sell it to an electricity retailer. We will explore the concept of corporate PPA, the current status of PPA overseas, and the expected trends in Japan, and examine KURAKEN's strengths, weaknesses, opportunities, and threats.
Corporate PPA Overview
A corporate PPA is a contractual agreement between a power generator and a corporate entity to supply renewable energy for a specified period. The PPA enables companies to purchase electricity directly from renewable energy generators such as wind, solar, or hydro. PPAs provide a predictable source of income for power generators, while also enabling corporations to meet their sustainability goals and reduce their carbon footprint.
Current Status of PPA Overseas and Trends Expected in Japan
PPAs have gained widespread adoption overseas, especially in Europe and the United States. In 2020, renewable energy PPAs accounted for 25% of all corporate PPAs globally. The adoption of renewable energy PPAs is expected to continue to grow as corporations seek to reduce their carbon footprint and meet sustainability goals. The Japanese market for renewable energy PPAs is still relatively small compared to the European and US markets. However, with the country's commitment to reducing carbon emissions, the Japanese government is expected to promote the adoption of renewable energy PPAs.
Farming PPA is a type of corporate PPA that is gaining popularity worldwide. This model involves generating renewable energy on farmland, thus enabling farmers to earn additional income from their land while also contributing to reducing carbon emissions. Farm-based solar power generation is a particularly attractive option for farmers, as it does not require the use of agricultural land for food production.
Assumed Business Model
KURAKEN, a construction company that has been operating in Ibaraki Prefecture for 50 years, plans to construct a solar power plant on land it has acquired. The power generated will be sold to an electricity retailer through a corporate PPA. The KURAKEN PPA Business Challenge aims to provide renewable energy while also generating income for KURAKEN and contributing to the local community's economic development.
KURAKEN's Strengths
KURAKEN's strengths lie in its in-house construction capability, local land information, and its proven track record in photovoltaic power generation equipment construction and construction know-how. As a construction company that has been operating in Ibaraki Prefecture for 50 years, KURAKEN has a wealth of experience and knowledge of the local area, including access to information on available land. This gives KURAKEN an advantage in land acquisition, which is crucial for the success of the project. Additionally, KURAKEN's in-house construction capability and proven track record in photovoltaic power generation equipment construction and construction know-how ensure that the solar power plant will be constructed to the highest standards.
What KURAKEN Needs
To realize its vision, KURAKEN needs funds, a buyer of electricity, and agricultural know-how or partners for farm-based solar power generation. KURAKEN will require significant funding to construct the solar power plant and acquire the necessary equipment. This funding can be obtained through investment from investors, loans from banks, or crowdfunding. KURAKEN also needs to find a buyer of electricity who will enter into a corporate PPA to purchase the power generated by the solar power plant. Finally, KURAKEN may need agricultural know-how or partners to implement a farm-basedsolar power generation project that could involve local farmers in Ibaraki Prefecture. Farm-based solar power generation could provide additional income for farmers while also contributing to the local economy and reducing carbon emissions. By partnering with local farmers, KURAKEN can also gain access to available farmland and increase the potential for success.
Conclusion
The KURAKEN PPA Business Challenge presents an exciting opportunity for the company to contribute to the global effort to reduce carbon emissions while also generating income for the company and contributing to the local economy. KURAKEN's strengths lie in its in-house construction capability, local land information, and proven track record in photovoltaic power generation equipment construction and construction know-how. To realize its vision, KURAKEN needs funding, a buyer of electricity, and agricultural know-how or partners for farm-based solar power generation. With the potential for success, the KURAKEN PPA Business Challenge is an initiative worth keeping an eye on. As the world shifts towards renewable energy sources, initiatives like the KURAKEN PPA Business Challenge play a vital role in creating a sustainable future for all.
SHO YAMASAKI
First-Class electrical work operation and management engineer
First-type electrical work engineer
Second-Class civil work operation and management engineer
Managing engineer
https://www.english.kuraken-k.com/