Itochu to Construct Renewable Energy Networks for Amazon and Meta in Japan and the US

Japanese trading firm Itochu is set to revolutionize the energy landscape for technology giants such as Amazon.com and Meta (formerly known as Facebook), unveiling plans to build renewable energy supply networks in Japan and the United States. These networks will cater to the enormous electricity demands of data centers and other facilities these tech giants operate, signaling a significant step towards a sustainable energy future.

Sources have revealed that Clean Energy Connect (CEC), a solar power company within the Itochu group, has inked a groundbreaking 20-year contract with Amazon. Amazon will secure renewable energy from CEC over an extended period through a “corporate power purchase agreement (PPA),” while Itochu will shoulder the investment burden for constructing the power plants.

CEC is gearing up to invest over 10 billion yen ($75 million) by the fiscal year 2024 to establish numerous small-scale solar power plants exclusively designed to cater to Amazon’s power needs. These plants will be distributed across approximately 700 locations in Japan, collectively boasting a substantial capacity of 38,000 kilowatts. This ambitious project ranks among the largest corporate PPAs in Japan.

Each of these solar installations will feed power directly into Amazon’s data centers and distribution facilities using existing power grids. CEC’s strategy includes the development of small solar power plants at 5,000 underutilized sites across Japan by the fiscal year 2025, generating an output equivalent to that of a compact thermal power plant. To further strengthen its position, CEC has already entered purchase agreements with notable entities like NTT Group and Shimizu Corp., setting its sights on future expansion, particularly catering to international demand from companies like Amazon.

In alignment with its commitment to environmental sustainability, Amazon aims to transition all its operational electricity usage to renewable sources by 2025. With an existing renewable energy portfolio of over 20 million kW across 22 countries globally, the tech giant continues to make strides in this arena, adding more than 8 million kW in capacity in just the year 2022.

Even in the Japanese market, Amazon’s pursuit of renewable energy is evident. In 2021, it entered a 10-year agreement with Mitsubishi Corp. to procure 22,000 kW of renewable energy power.

Beyond Japan’s borders, Itochu has set its sights on North America. Collaborating with energy firm General Electric (GE) and an investment fund, Itochu is engaged in the construction of a wind power plant near Houston. This facility, expected to be operational by the close of 2023, will utilize GE’s wind turbines and boasts an impressive capacity of 160,000 kW. Over a span of 15 years, this plant will supply Meta (formerly Facebook) with its energy needs.

The combined investment from these three companies is anticipated to reach several tens of billions of yen. Tyr Energy, a subsidiary of Itochu, will manage power sales, while GE will oversee the wind power plant’s operation, maintenance, and inspection. The partners are actively exploring opportunities for further expansion in the wind power sector, contingent upon demand from local businesses.

Citing data from the International Energy Agency, it is evident that energy consumption within data centers globally has surged from 200 billion kilowatt-hours in 2015 to a staggering 320 billion kWh in 2021. This trend underscores the urgency for major tech players to secure renewable energy sources as they work towards carbon neutrality.

In Japan, the development of large-scale renewable energy power plants requires rigorous environmental impact assessments, leading to extended project timelines. However, Itochu’s innovative approach capitalizes on low-voltage, small-scale solar power systems that can be executed within approximately six months from site selection to construction. These streamlined projects enable Itochu to effectively meet the energy demands of tech giants while adhering to environmental considerations.

As the world grapples with the challenges of climate change, Itochu’s pioneering efforts to establish renewable energy networks for tech giants like Amazon and Meta herald a promising transition towards cleaner and more sustainable energy solutions, setting an example for other industries to follow suit.