Climeon opens up in Japan with a breakthrough order
Sweden-based heat to power technology developer Climeon AB has announced that it has received its first order within geothermal power in Japan. Four "Heat Power" modules have been purchased by Baseload Capital Sweden on the behalf of a newly started energy operator that will be jointly owned by a number of Japanese stakeholders and Baseload Capital Sweden.
The energy situation in Japan represents a unique possibility for Climeon and we are incredibly pleased with this first step into the Japanese geothermal heat power market. Our technology is a perfect fit, the availability of hot water is great, and the electricity prices are high. This enables us to contribute to increasing the sustainable electricity production with good profitability and at low risk, commented Thomas Öström, CEO of Climeon.
The four Heat Power modules are to be delivered during 2019 and expected to be put into operation the same year. The order value amounts to just over EUR 2 million, plus service fees and software licenses. Climeon’s role in the project is as a supplier, but the company also owns a 20 percent share in Baseload Capital Sweden, a company that was set up in January this year to finance investments in renewable energy projects.
After the Fukushima nuclear power plant disaster, the Japanese government introduced a range of economic incentives such as feed-in tariffs (FIT) and simplified the requirements for permits and surveys in a bid to accelerate the shift towards local green electricity. Japan is also located in one of the world’s most active volcanic areas and has many hot springs around the country, from which geothermal heat can be used for power generation.
According to Climeon, just over 2 percent of Japan’s known geothermal energy resources are currently utilized yet the price of electricity generated from geothermal heat power in Japan currently fetches over EUR 290 per MWh, which is eight times higher than the electricity price in Sweden.
We see great potential for geothermal heat power in Japan and believe that a quick establishment is important in order to succeed. Delivery times are long and in order to win time, we have placed an order while the local Heat Power operator forms a company, said Alexander Helling, Chief Investment Officer at Baseload Capital Sweden.
In May this year, Climeon opened a representation office in Nagano to explore and evaluate the company’s ability to sell primarily geothermal heat power modules in the country. Japan is one of Climeon’s priority markets and Climeon employees will be based in the country to work with partners to explore and deepen the understanding of the Japanese market.
Japan has all the prerequisites for becoming a big market for Climeon. By opening a representation office, we get the right conditions to get to know the market while showing local stakeholders that we have a long-term perspective, ended Thomas Öström.