TOKYO -- Japanese trading house Mitsubishi Corp. will start selling renewable electricity certificates that buyers can use as offsets for their energy consumption, Nikkei has learned. Murata Manufacturing, an electronic components maker and major Apple supplier, will be the first to receive a certificate.
This will be Japan's first case of a so-called virtual power purchase agreement. Under the scheme, Mitsubishi will actually build a solar power plant and deliver generated electricity to the utilities market, and separately sell renewable energy certificates to those who want to use them as offsets. The purchaser of a certificate might not necessarily use renewable electricity but the certificate still acts as an offset.
Non-fossil fuel certificates have been on the Japan Electric Power Exchange since 2018, but they do not necessarily provide detailed information about the electricity being traded. The certificate offered by Mitsubishi will detail where and how the electricity is produced, and its veracity will be guaranteed by Mitsubishi.
To issue the certificates, the trading house will invest more than 10 billion yen ($74 million) to develop 70 megawatt solar power plants in Japan by the end of March 2026.
Mitsubishi will first sell certificates worth 100 million kilowatt-hours, and they will be gradually increased to 300 million kWh, or about 10% of Murata's annual power use.
Non-fossil fuel certificates typically trade for 0.3 yen per kWh. The certificates will be sold with some premium.
Companies are increasingly demanding that their suppliers step up their decarbonization efforts. Apple, for example, has set a plan to achieve virtually zero carbon dioxide emissions from the production and use of its products by 2030, and has asked its business partners to use 100% renewable energy. Failure to achieve this could result in the loss of deals. Murata, a major supplier of the tech giant, is also hurrying to respond to the requirement.
Virtual power supply agreements are already widely used in the U.S. and Europe. McDonald's, for instance, purchased certificates worth a total of 380 megawatts from a number of renewable power plants. AT&T and EBay have also used a similar mechanism to achieve their own clean energy targets.