[Obayashi] Green Energy — 44 Plants, 344MW, and the Green Hydrogen Challenge

Note: This article is a factual summary based on Obayashi Corporation’s published IR material (Investors’ Guide, June 2026 edition). It is not a recommendation to buy or sell any security. Figures are as of the publication of the source material. Investment decisions are your own responsibility.

Green energy is one of Obayashi’s smaller businesses by revenue today, but it sits at the center of the group’s sustainability strategy and carries its own dedicated investment budget under the Medium-Term Business Plan 2022. This page of the Investors’ Guide 2026 covers the business’s guiding policy, its power-generation portfolio in Japan and overseas, and its push into green hydrogen.

Basic policy: Create, Pioneer, Sustain

Obayashi frames the business’s mission as ‘Creating Added Value Through Energy’: through energy, the company aims to expand choices for itself, its customers, and society, creating value and profit while enhancing corporate sustainability. That mission rests on three pillars, underpinned by a shared foundation the company describes as people capable of sound judgment and a flexible, evolving business model.

Pillar	Role
Create	Strengthen the foundation for business value creation, while prioritizing stable earnings
Pioneer	Take on challenges in new value domains to pioneer the future of energy and drive business growth and expansion
Sustain	Establish the conditions necessary for business and society to remain sustainable

Strategy and investment

At the strategy level, three priorities sit underneath the three-pillar framework.

• Focus on increasing earnings in the renewable energy power generation business
• Explore next-generation businesses in areas such as hydrogen and geothermal power
• Contribute to the wider Obayashi Group’s carbon neutrality

The Medium-Term Business Plan 2022 allocates ¥60.0bn of investment to the green energy business — a modest line next to the group’s construction and real estate spending, but one that funds all of the initiatives described below.

The power-generation portfolio

Obayashi’s generation portfolio splits cleanly along geographic lines. In Japan the fleet is overwhelmingly solar, built up across three decades of small and mid-sized installations; overseas it is smaller in site count but led by geothermal, a technology largely absent from the domestic portfolio.

Generation type	Japan	Overseas
Solar	31 sites	1 site
Onshore wind	3 sites	—
Offshore wind	1 site	—
Geothermal	—	4 sites
Hydroelectric	—	1 site
Woody biomass	2 sites	1 site
Total sites	37	7
Generation capacity (equity share)	approx. 285 MW	approx. 59 MW

Both totals are stated on an equity-share basis — the company’s proportional interest in each plant’s capacity, rather than the plants’ full nameplate output — which matters for the overseas figure in particular, since some of that capacity is held through the Eastland Generation joint venture described below rather than outright ownership.

Strategy in practice: domestic optimization, overseas expansion, green hydrogen

Domestic strategy — from FIT to FIP, and on-site PPA

Japan’s feed-in-tariff (FIT) system guarantees renewable power producers a fixed, above-market price for a set number of years after a facility starts operating; as Obayashi’s earliest solar installations reach the end of that guaranteed period (‘post-FIT’), the domestic portfolio’s strategic focus is shifting toward storage-battery utilization and the newer feed-in-premium (FIP) system, which pays a smaller top-up over the wholesale market price instead of a fixed rate. Alongside that transition, the company is expanding on-site power purchase agreements (PPA) at its own facilities, while wind and biomass sites already in operation are managed simply to secure stable earnings. The on-site PPA push is run through Obayashi Clean Energy Corporation, which has been installing solar generation equipment on the rooftops of group facilities — for example, the Cypress Sunadaya Toyo Industrial Park factory — to supply renewable energy for self-consumption.

Overseas strategy — Eastland Generation and geothermal expansion

Overseas, the strategy is expansion of power-generation capacity in Oceania, including through M&A and equity participation. In 2024, Obayashi acquired a 50% stake in Eastland Generation Limited in New Zealand, securing renewable generation capacity — including geothermal and hydroelectric assets — and gaining expertise the company says it can apply across its renewable energy business in both Japan and overseas. In March 2026, Eastland Generation’s new TOPP2 geothermal power plant commenced operations. On geothermal more broadly, the company also points to steady progress on domestic projects under development and to synergies with its overseas affiliated companies.

The hydrogen challenge

Obayashi is also building toward a green hydrogen supply chain spanning production to supply, in Japan and overseas, as a medium-to-long-term initiative. (Green hydrogen is hydrogen produced by using renewable electricity to split water via electrolysis, rather than from natural gas.) In 2024, the company successfully demonstrated marine transport of green hydrogen from New Zealand to Fiji and its subsequent use, with the hydrogen produced in New Zealand by Halcyon Power, a joint venture with a local partner. In 2026, it went a step further: establishing a consortium for hydrogen exports from New Zealand, beginning a feasibility study on transporting green hydrogen to Japan, and advancing demonstration tests for marine transport to Singapore.

What this means for investors

Green energy remains a small piece of group revenue next to domestic and overseas construction, but the ¥60.0bn Medium-Term Business Plan 2022 allocation — alongside a separate decarbonization push inside new business domains — signals it is being built out deliberately rather than opportunistically. The Eastland Generation stake and the New Zealand-to-Japan-and-Singapore hydrogen corridor are the two clearest signs of the business moving from a domestic rooftop-solar operation toward an international energy platform. For how this ¥60.0bn fits into the group’s overall investment spending, see the investment plan breakdown; for the six-capitals framework that positions green energy within the group’s wider value-creation story, see value creation process; and for the profit and sales context around the ‘other businesses’ line that green energy sits inside, see the company overview.

This article is part of our complete breakdown of the Obayashi Investors’ Guide 2026. See the hub article for the full series.

Note: This article is a factual summary based on Obayashi Corporation’s published IR material (Investors’ Guide, June 2026 edition). It is not a recommendation to buy or sell any security. Figures are as of the publication of the source material. Investment decisions are your own responsibility.