Enviva to supply pellets to power plant being converted in Japan

By Erin Voegele | October 31, 2018

On Oct. 31, Enviva announced that off-take contract agreements with Mitsubishi Corp. are now firm. The announcement follows news released by Mitsubishi the previous day indicating construction is underway on a biomass power plant conversion in Japan.

In its announcement, Enviva said that conditions precedent to its previously announced take-or-pay off-take contracts to supply 630,000 metric tons per year of wood pellets to a Japanese customer have been satisfied and the agreements are now firm. Under the terms of the agreements with Mitsubishi, Enviva said it will be the exclusive, long-term imported biomass fuel suppliers to Aioi Bioenergy Corp., a joint venture between Mitsubishi Corp. Power Ltd. and Kansai Electric Power Co. Inc., which is converting an existing oil-fired power plant to biomass.

According to Enviva, deliveries under the contracts are scheduled to begin in late 2022 and continue for at least 15 years.

“Our partners at Aioi Bioenergy and Mitsubishi Corporation are at the forefront of Japan’s commitment to reducing the impacts of climate change,” said John Keppler, chairman and CEO of Enviva. “We are privileged and honored to be the sole source of supply of sustainable wood pellet fuel to the Aioi facility, one of the largest dedicated biomass projects in Japan announced to date, and we look forward to helping Mitsubishi and Kansai deliver on the promise of renewable energy.”

On Oct. 30, Mitsubishi Corp. announced its wholly owned subsidiary Mitsubishi Corp. Power Ltd. has begun work to build a biomass power generation plant in western Japan that is being executed through Aioi Bioenergy.

In a statement, Mitsubishi said Aioi BioEnergy has reached an agreement with lenders for the procurement of a loan under a non-recourse project finance scheme, which is enabling Aioi Bioenergy to begin plant design and equipment procurement.

The project will convert Unit 2 of Aioi Power Station in Hyogo Prefecture from the use of heavy or crude oil to wood pellets. Mitsubishi said the unit has been offline since April 1, 2018, but will result operations once the conversion process is complete. The unit is currently expected to begin generating power using biomass fuel in January 2023 and operate for a 20-year period.