Microsoft Signs 100 MW Solar PPA with Shizen Energy to Power AI in Japan

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Microsoft continues to advance its renewable energy transition in Japan, having recently confirmed the signing of three new solar Power Purchase Agreements (PPAs) with Japanese renewable energy provider Shizen Energy. The agreements, covering facilities across Kyushu and Chugoku, will deliver a combined generation capacity of 100 megawatts (MW). Following their 2023 partnership on the Inuyama Solar Project in Aichi Prefecture, this marks the fourth long-term contract between the two companies — signaling Microsoft’s expansion into the next phase of its green energy procurement strategy in Japan.

Shizen Energy stated that of the three newly contracted solar power plants, one facility in Kyushu has already begun operations, while the other two, located in Chugoku, are currently under construction and will be managed by its subsidiary Shizen Operations upon completion. The projects are funded by a consortium of domestic and international financial institutions, all of which have completed project financing — a sign of growing global investor confidence in Japan’s long-term renewable energy market.

Executive Director Rei Ushikubo of Shizen Energy noted that securing support from both international and Japanese lenders underscores the increasing maturity of long-term renewable power agreements in Japan. As major corporations intensify their pursuit of sustainable energy, PPAs have become a vital mechanism driving structural transformation in the country’s energy market.

Microsoft first entered into a Virtual Power Purchase Agreement (VPPA) with Shizen Energy in 2023 for the Inuyama Solar Power Plant, marking its first renewable energy procurement deal in Japan.

A Power Purchase Agreement (PPA) is a long-term contract between a corporation and a power producer, guaranteeing the purchase of renewable electricity at a stable price. A virtual PPA, by contrast, operates through the exchange of renewable energy certificates (RECs) or similar environmental attributes, allowing companies to offset carbon emissions even without direct physical access to the generation site.

This initiative not only supports Microsoft’s commitment to achieving carbon negativity by 2030 but also reflects the growing demand among major cloud and AI companies for a reliable, sustainable energy supply. As the energy consumption of generative AI and cloud computing continues to surge, powering data centers with renewable energy has become a central strategic priority for global technology firms.

The expansion of Microsoft’s partnership with Shizen Energy signifies the internationalization and long-term stabilization of Japan’s PPA market, setting a precedent for other multinational enterprises seeking to secure green energy in the region. With additional solar and wind projects expected to come online in the near future, Japan’s corporate renewable transition is poised to accelerate even further.