Fuel Procurement, PKS Prices and Foreign Exchange Fluctuations
First written in FY2017. 4 of 13 entries say "Worsened", first in FY2018. Latest entry: 2026-08-06.
Renova moved to the "Worse" side of this theme in 2018, 6 years before the typical company in this theme (2024).
3 other companies' latest entry also says "Mitigated".
- 2026-08-06MitigatedFinancial Results Presentation
「Approximately 60% of biomass fuel is subject to fixed prices under long-term contracts. Approximately 40% is exposed to fluctuations in spot fuel prices. Approximately 90–95%*2 of USD/JPY exposure has been hedged」
The company has disclosed the proportion of biomass fuel covered by fixed prices and its foreign-exchange hedge ratio, explaining that spot fuel prices have remained soft. - FY2026Annual renewal of foreign exchange hedgesAnnual report
「To hedge this future foreign exchange risk, these SPCs had entered into foreign exchange forward contracts totaling US$4,344 million against these long-term fuel purchase contracts and other agreements as of the end of March 2026.」
The amount of foreign exchange hedges against long-term fuel purchase contracts and other agreements was updated to US$4,344 million. - 2026-05-13MitigatedFinancial Results Presentation
「Approximately 60% of biomass fuel is subject to fixed prices under long-term contracts. Approximately 40% is exposed to fluctuations in spot fuel prices. Approximately 90–95%*2 of USD/JPY exposure has been hedged」
The company has quantified the proportion of biomass fuel covered by fixed-price contracts, its exposure to spot prices and the status of its foreign-exchange hedges. It explains that spot fuel prices have remained soft since 2025. - FY2025Annual renewal of foreign exchange hedgesAnnual report
「To hedge this future foreign exchange risk, these SPCs had entered into foreign exchange forward contracts totaling US$4,615 million against these long-term fuel purchase contracts and other agreements as of the end of March 2025.」
The amount of foreign exchange hedges against long-term fuel purchase contracts and other agreements was updated to US$4,615 million. Exposure to fuel procurement contracts, spot contracts and foreign exchange fluctuations continues to be disclosed. - FY2024MaterialisedAnnual report
「Since Russia's invasion of Ukraine, resource prices and wholesale electricity prices have surged. Although the price increases have recently shown some signs of stabilizing, biomass fuel prices have remained higher than before, affecting profitability during the fiscal year through higher fuel costs in the biomass power generation business.」
High resource and wholesale electricity prices persisted and actually affected annual profitability through higher biomass fuel costs. Foreign exchange hedges against long-term fuel purchase contracts and other agreements totaled US$4,900 million as of the end of March 2024. - FY2024-Q3MaterialisedAnnual report
「Earnings for the nine-month cumulative consolidated period were affected by the year-on-year increase in the fuel cost-to-sales ratio in the biomass power generation business.」
Surging resource and wholesale electricity prices affected earnings for the nine-month cumulative consolidated period through the year-on-year increase in the fuel cost-to-sales ratio in the biomass power generation business. - FY2024-Q2MaterialisedAnnual report
「Since Russia's invasion of Ukraine, resource prices and wholesale electricity prices have surged. Although the price increases have recently shown some signs of stabilizing, earnings for the six-month period ended September 2022 were affected by an increase in the fuel cost-to-sales ratio in the biomass power generation business compared with the previous year.」
Surging resource and wholesale electricity prices affected earnings for the six-month cumulative consolidated period through the year-on-year increase in the fuel cost-to-sales ratio in the biomass power generation business. - FY2023MaterialisedAnnual report
「Since Russia's invasion of Ukraine, resource prices and wholesale electricity prices have surged. Although the price increases have recently shown some signs of stabilizing, they affected profitability during the fiscal year through higher fuel costs in the biomass power generation business.」
Surging resource and wholesale electricity prices actually affected profitability through higher biomass fuel costs, with fuel costs and related expenses increasing by ¥281 million year on year. - FY2022WorsenedAnnual report
「To hedge this future foreign exchange risk, these SPCs had entered into foreign exchange forward contracts totaling US$5,136 million against these long-term fuel purchase contracts and other agreements as of the end of March 2022.」
The scope of the long-term fuel purchase contracts expanded to multiple biomass projects in operation or under construction, and the amount of foreign exchange hedges increased from US$4,515 million to US$5,136 million. - FY2021WorsenedAnnual report
「As of the end of March 2021, the company had entered into foreign exchange forward contracts totaling US$4,515 million against these long-term fuel purchase contracts and other agreements.」
The scope of the long-term fuel contracts expanded, and the amount of foreign exchange hedges increased from the previously disclosed US$1,041 million to US$4,515 million. - FY2019WorsenedAnnual report
「The long-term fuel purchase contracts for Tokushima Tsuda Biomass are denominated in US dollars. If foreign exchange rates fluctuate after the power plant, scheduled to begin operations in 2023, commences operations, this may affect the business, results and financial position of the Group. To hedge this future foreign exchange risk, the Group had entered into foreign exchange forward contracts totaling US$1,041 million against these long-term fuel purchase contracts as of the end of March 2019.」
For Tokushima Tsuda Biomass, the company disclosed a US dollar-denominated fuel contract for a plant scheduled to begin operations in 2023 and foreign exchange hedges totaling US$1,041 million. While the foreign exchange exposure has become more specific, hedging is also in place. - FY2018WorsenedAnnual report
「Imported materials for Karita Biomass, such as wood pellets and PKS, are procured partly under long-term supply contracts with suppliers at fixed prices and in fixed quantities, and partly through flexible spot contracts in response to changes in market conditions and fuel demand.」
In addition to the fuel risks of the existing URE facilities, the scope has expanded to include imported fuel procurement for Karita Biomass, spot prices, freight costs, foreign exchange fluctuations and individual guarantee obligations to suppliers. - FY2017First statedAnnual report
「Under the business plan for the biomass power plant, approximately 70% of fuel by weight consists of domestically sourced unused wood, to which the FIT rate of ¥32/kWh applies, and approximately 30% consists of imported PKS (palm kernel shell) material, to which the FIT rate of ¥24/kWh applies.」
The fuel mix has been quantified, with risks identified including insufficient supplies of domestically sourced unused wood, unforeseen events affecting PKS suppliers, fluctuations in prices, freight costs and foreign exchange rates, and export restrictions.