Tokyo Gas Co. said Wednesday it will invest around ¥20 billion ($190 million) in Octopus Energy Group Ltd., paving the way for the emerging British firm to supply renewable electricity in Japan.
Tokyo Gas and Octopus Energy will set up a joint venture in February and start offering services in the fall of 2021 in the country where renewables satisfy only a fraction of total energy needs.
The utility firm aims to create a different brand from Tokyo Gas with the aim of securing a few million customers across Japan in 2030, a company official said.
Octopus Energy, launched in 2016, sells electricity in the United Kingdom, supplying renewable energy to customers based on various plans, including one for charging electric vehicles.
"I believe Octopus Energy, which is delivering diversified tariffs and services using digital technology through low costs in the U.K. and overseas, is the most appropriate partner," Tokyo Gas President Takashi Uchida said in a statement.
Tokyo Gas is known in Japan as a major provider of city gas but it also sells electricity. The firm will invest in the startup via a wholly owned subsidiary to be established in London in January.
For Octopus Energy, Tokyo will serve as a "launch pad" for its further expansion into the Asian market.
"This joint venture will bring our exciting approach to renewable energy and technology to the world's largest competitive energy market, and the investment will turbocharge our mission to revolutionize energy globally," Octopus Energy Founder and CEO Greg Jackson said.
Japan is ramping up its efforts to fight global warming by substantially cutting greenhouse gas emissions. Prime Minister Yoshihide Suga has pledged to achieve carbon neutrality, or net zero emissions of carbon dioxide, by 2050 and greater use of renewables is seen as key.
Under the current government plan compiled before Suga took office in September, Japan aims for renewable energy to account for nearly a quarter of its total power generation in fiscal 2030 while fossil fuels, including coal, will make up about half.
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