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Jera Eyes IPO for 6x Green Capacity Boost by 2035

Jera Co. plans sixfold renewable energy increase by 2035, explores IPO for funding massive green transition.

By Max Weldon

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4/15, 02:28 EDT
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Key Takeaway

  • Jera Co., Japan's top power producer, plans a sixfold increase in renewable capacity by 2035, exploring an IPO for funding.
  • Strategic investments include €1.6 billion in Parkwind and $2.2 billion with NTT Anode Energy Corp., enhancing its green energy portfolio.
  • Positive power supply outlook for Japan with new gas-fired units and nuclear power resurgence, amid stable electricity market dynamics.

Renewable Energy Expansion

Japan's largest utility company, Jera Co., has announced ambitious plans to significantly increase its renewable energy capacity. The Tokyo-based firm aims to develop 20 gigawatts of renewable generation capacity by fiscal 2035, which represents a sixfold increase from its current pipeline. This initiative underscores Jera's commitment to transitioning towards more sustainable energy sources. Yukio Kani, chairman and co-chief executive officer of Jera, highlighted the substantial investment required to achieve these goals, indicating that "trillions of yen in investment will be needed." To facilitate this massive rollout, Jera is exploring various funding options, including the possibility of an initial public offering (IPO) and inviting additional shareholders to invest.

Strategic Investments and Partnerships

In line with its renewable energy ambitions, Jera has been actively engaging in strategic investments and partnerships. The company recently acquired European offshore wind operator Parkwind for €1.6 billion ($1.7 billion) and the Japanese wind farm business Green Power Investment Corp. in collaboration with NTT Anode Energy Corp. for approximately $2.2 billion. Furthermore, Jera has invested around $1.4 billion in Woodside Energy Group Ltd.'s flagship liquefied natural gas (LNG) project, acquiring a 15.1% stake. These moves not only bolster Jera's renewable energy portfolio but also ensure a stable supply of energy in Japan and Asia as a whole. The Scarborough LNG project, in which Jera invested, is expected to produce up to 8 million tons a year of LNG and is scheduled to deliver its first shipment in 2026.

Power Supply and Market Dynamics

Japan's power supply outlook appears promising for the upcoming summer and winter seasons, with reserve ratios forecasted to exceed minimum requirements across all regions. This positive outlook is partly attributed to Jera Co.'s new gas-fired unit at Goi Thermal Power Station and a resurgence in nuclear power, which are key to ensuring stable electricity amidst Japan's grid challenges. The dynamic electricity market is reflected by a 42% drop in next-day delivery prices and fluctuations in Tokyo power futures, amid global commodity market shifts. These developments indicate a robust and stable energy infrastructure capable of meeting Japan's electricity demands.

Management Quotes

  • Yukio Kani, Chairman and Co-Chief Executive Officer of Jera Co.:

    "Trillions of yen in investment will be needed. It’s possible that we will invite another shareholder to invest or ultimately consider IPO as an option."