Monthly Report

ML Power to convert 6.3MW of solar from FIT to FIP for virtual PPA with Nippon Steel Kowa Real Estate

November 1, 2024
Nippon Kowa Real Estate
Nippon Kowa Real Estate will purchase environmental value from 9.6MWDC worth of ML Power’s power plants. (Image: Nippon Kowa Real Estate)

ML Power, a wholly-owned subsidiary of Mizuho Lease, and Nippon Steel Kowa Real Estate signed a virtual PPA on October 31, 2024, the real estate developer announced. Additionally, ML Power will also sell J-Credit renewable energy certificates to Nippon Steel Kowa Real Estate.

As part of the PPA, ML Power will take 66 operational solar power plants with a combined 6.3MWDC output off the feed-in-tariff (FIT) subsidy scheme, which pays generators a fixed amount per kWh, and operate them under the feed-in-premium (FIP) scheme instead. While doing so, it will trade the fixed revenue for a variable premium on top of the revenues it can generate through the PPA.

Due to the PPA being virtual, ML Power will only transfer non-fossil certificates to Nippon Steel Kowa Real Estate, while selling the generated power into the wholesale power market. Nippon Steel Kowa Real Estate will purchase power from its retailer and settle the difference between the wholesale market price and PPA price with ML Power.

While details about the power plants that will be part of the PPA were not disclosed, the purchased renewable value will count as being additional under the RE100 scheme according to the statement, meaning it will be procured from power plants commissioned within the last 15 years.

In addition to the non-fossil certificates purchased through the virtual PPA, Nippon Steel Kowa Real Estate will also purchase 3.3MWDC-worth of J-Credits from ML Power each year.

According to the Japan Energy Hub PPA database, Nippon Kowa Real Estate has also been involved in other PPAs. In September 2023, rooftop solar plants were put in service at its LOGIFRONT Urayasu and LOGIFRONT Sayama facilities; the generated power is supplied to each facility through an on-site PPA with excess power being supplied to the company’s other facilities through an off-site PPA. At the end of last month, a similar scheme was introduced at LOGIFRONT Tokyo Itabashi.

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