Octopus Renewables and Zestec set their sights on £100m solar portfolio in new partnership

Octopus Energy signs first Japanese solar deal as it seeks to conquer Asian renewables markets

An image of the Octopus logo on its company office. Image: Octopus Energy.

Octopus Energy has signed its first solar contract in Japan with Yotsuya Capital, as it continues to invest in the Japanese energy market. 

The company said the contract was an “initial seven figure investment, which was made on behalf of the Sky fund (ORI SCSp) which is managed by Octopus Energy Generation,” and would “enable Yotsuya Capital to develop 250MW of new solar farms in Japan in the next five years.” 

Octopus Energy made its first entry into the Japanese energy market in 2020 with a partnership with Tokyo Gas. That deal was a 30:70 venture which saw Octopus invest £184 million ($247 million) into TG Octopus Energy. 

TG Octopus now has more than 160,000 customers in Japan and aims to reach 1 million by 2026. Yotsua plans to sell the energy generated from its solar projects in the form of long term corporate Power Purchase Agreements (PPAs), which provides guarantees for the supply of electricity to customers. 

The growth in Japan reflects Octopus Energy Group’s rapid global expansion and company valuation, going from around £1.6 billion ($2 billion) in 2020 to £4 billion ($5 billion) a year later. In February 2023 the company announced that global revenues had increased from £1.9 billion to £3.9 billion in the 2021/22 financial year. 

Renewables accounted for only around 20% of electricity generation in Japan in 2021, far behind the UK which reached 40% renewable electricity generation in the same year. The Japanese government is aiming to reach 38% of electricity generated from renewables by 2030. 

In a statement, Octopus said the deal with Yotsuya Capital could produce enough solar power to power the equivalent of “almost 100,000 homes”.

“There’s a huge opportunity to help meet Japan’s renewables targets and accelerate its clean energy transition,” said Zoisa North-Bond, chief executive of Octopus Energy Generation. “This investment in fast-growing solar developer Yotsuya is our first step into Asian renewables – and it’s only the beginning. We’ve got big plans to scale our team in Asia, and invest in and build even more green power across the continent.”   

The trade relationship between the UK and Japan is growing, with the UK joining the Comprehensive and Progressive Trans Pacific Partnership (CPTPP). The UK foreign minister James Cleverley recently telephoned his Japanese counterpart ahead of a planned meeting of G7 foreign ministers in Japan later this month. 

Greg Jackson, founder and chief executive of Octopus, recently hailed Britain’s membership of the CPTPP and encouraged other British companies to invest in Japan. In March 2023, Octopus also announced a £880 billion (€1 billion) investment in the French renewables market over the next two years. 

Octopus is also continuing to expand its offerings in the UK, announcing in January that it plans to offer customers domestic solar PV installations. 

Solar Power Portal’s publisher Solar Media will host the UK Solar Summit on 27-28 June 2023 in London. The event will explore UK’s new landscape for utility and rooftop solar, looking at the opportunities within a GW+ annual market, and much more. For more information, go to the website.

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