Toyo Kohan Introduces Virtual PPA Utilizing FIP Onshore Wind Power Plants

Toyo Kohan Co., Ltd. (Headquarters: Shinagawa-ku, Tokyo; Representative Director and President: Masahiro Kai; hereinafter "Toyo Kohan"), a consolidated subsidiary of Toyo Seikan Group Holdings Co., Ltd. (Headquarters: Shinagawa-ku, Tokyo; Representative Director and President: Takuji Nakamura), has signed a contract for a virtual PPA*2 related to onshore wind power generation utilizing the FIP scheme*1 with HSE Co., Ltd. (Headquarters: Hitachi City, Ibaraki Prefecture; Representative Director and President: Kei Ishida; hereinafter "HSE") as of March 27, 2026.

This initiative involves HSE supplying environmental value equivalent to 18 GWh annually, generated from a total of three FIP onshore wind power plants operated by the HSE Group, to Toyo Kohan, with HSE acting as an aggregator*3. This is expected to reduce Toyo Kohan's greenhouse gas (GHG) emissions by approximately 8,700 tons annually.

Both companies will continue to explore expanding PPAs at other power plants and promote decarbonization.

Toyo Kohan aims to achieve a decarbonized society and, based on the mid-to-long-term environmental target "Eco Action Plan 2030" set by our group, is working on energy-saving and energy-creation activities with targets of a 50% reduction in GHG emissions (Scope 1, 2) by FY2030 (compared to FY2019) and carbon neutrality by FY2050. As part of energy-creation activities, we are promoting the introduction of on-site and off-site solar power generation, and in conjunction with this initiative, we plan to replace approximately 25% of the electricity used at the Kudamatsu Plant with renewable energy by FY2030.

This initiative marks our group's first introduction of renewable energy derived from wind power, as well as our first virtual PPA. We will continue to engage in GHG reduction activities and contribute to the realization of a sustainable society.

*1 FIP Scheme: Abbreviation for "Feed-in Premium" scheme, launched in April 2022 with the aim of increasing investment incentives for power generators and promoting the introduction of renewable energy. It is a mechanism that provides a fixed premium (subsidy) to power generators for electricity sold at market prices.

*2 Virtual PPA: PPA (Power Purchase Agreement) is a contract model where an electricity consumer directly purchases renewable energy from a PPA operator (transfer of non-fossil certificates for renewable energy electricity). A virtual PPA is a means by which an electricity consumer virtually procures only the environmental value of renewable energy generated at a power plant constructed outside the consumer's premises.

*3 Aggregator Business Operator: An operator that controls the balance between supply and demand of renewable energy, maximizes the utilization of energy resources (power generation facilities, storage facilities, etc.), and supplies electricity to consumers such as retail electricity providers. Notification to the Minister of Economy, Trade and Industry is required.

Power Plant Overview

(1) Manyo no Sato Wind Power Plant

Power Generator: Minamisoma Sustenergy Co., Ltd. (60% subsidiary of HSE)

Output: 9,400kW

Estimated Annual Generation: 14,000,000kWh (50% of environmental value generated supplied to Toyo Kohan)

(2) Noshiro Port No. 1 Wind Power Plant

Power Generator: Yoneshirogawa Wind Power Generation Co., Ltd. (51% subsidiary of HSE)

Output: 1,990kW

Estimated Annual Generation: 5,700,000kWh (100% of environmental value generated supplied to Toyo Kohan)

(3) Noshiro Port No. 2 Wind Power Plant

Power Generator: Yoneshirogawa Wind Power Generation Co., Ltd. (51% subsidiary of HSE)

Output: 1,990kW

Estimated Annual Generation: 5,300,000kWh (100% of environmental value generated supplied to Toyo Kohan)

<Manyo no Sato Wind Power Plant>

HSE Overview

Company Name: HSE Co., Ltd.

Representative: Kei Ishida, Representative Director and President

Location: 3-2-2 Saiwai-cho, Hitachi City, Ibaraki Prefecture

Date of Establishment: March 1, 2016

Business Overview: Renewable energy power generation business, etc.

Capital: 50 million JPY

Website: https://www.h-sustainable-energy.co.jp/

HSE operates 30 wind power plants nationwide with a total capacity of 255MW. Starting in FY2023, it launched its renewable energy aggregation business, and by FY2026, the HSE Group's FIP (including power plants for which transition certification applications are pending) wind power plants are expected to expand to 19 locations with a total capacity of 167MW. As an aggregator operating top-class FIP wind power plants in Japan, it is making a significant contribution to promoting the utilization of the FIP scheme in Japan.

The HSE Group has been promoting the development of wind power plants and is deploying multiple projects nationwide. Through the development of renewable energy sources and corporate PPAs utilizing the FIP scheme, it is working on local production and consumption of energy and serving customers.