Few companies have such outsized ambitions to transform Japan’s power industry as Erex Co. In the last few months, the firm of 182 people has engaged in talks to take over several coal power plants and convert them to renewable energy. It also filed plans to build Japan’s first ever hydrogen-fired generation facility.

Once a small-scale electricity retailer in Japan’s northeast, the company was quick to seize the opportunities for new players in the industry since 2011. Erex grew from a retailer to a producer and developer, and in the process became a listed company that posted its best ever results during the Covid-affected fiscal 2020/21.

As Erex bids to be a top player in Japan’s emerging biomass power market and a pioneer of hydrogen generation, investor interest has followed. The stock surged 60 percent in the first seven months of this year before a recent pullback.

With decarbonization a keystone of Japan’s recent energy policy, the decades-old order of the country’s electricity industry may be due for a disruption. And a new player like Erex seems to offer the perfect growth story. But just how realistic is it?