Baseload Capital launches new geothermal power plant in Japan, expanding its presence in the country’s untapped geothermal sector
Bill Gates-backed Baseload Capital has commissioned its second geothermal power plant in Japan, marking further expansion into a market with significant untapped geothermal resources.
By : Robert Buluma
Image : Kazuyuki Akaishi, manager at Furusato Netsuden and Anders Helling, CEO at Baseload Capital. Press photo., Credit: Imapct loop
The Waita Model: How a Swedish-Backed Startup Just Cracked Japan's Geothermal Code
KUMAMOTO / STOCKHOLM — In the misty highlands of Kumamoto Prefecture, on the southern island of Kyushu, a quiet revolution in renewable energy has just switched on.
On June 4, 2026, Stockholm-based Baseload Capital officially commissioned its second geothermal power plant in Japan: Waita No. 2. While a 4.995 MW facility might seem modest compared to a nuclear reactor or an offshore wind farm, the financial and political ramifications of this event are seismic.
For decades, Japan has been described as the "Saudi Arabia of geothermal." The archipelago sits atop the world's third-largest geothermal resources, estimated at 23 gigawatts — enough to power millions of homes. Yet, for half a century, less than 3% of this potential has been tapped. The culprit was never technology, but a tangled web of regulation, powerful hot spring interests, and deep-seated community distrust.
Now, backed by Bill Gates and Google, Baseload Capital believes it has found the "key" to unlock this trillion-yen market. The secret isn't drilling deeper; it is sharing the wealth.
Part 1: The 23 GW Elephant in the Room
To understand why Waita No. 2 is such a big deal, one must first understand the failure of the Japanese energy grid.
Before the Fukushima disaster in 2011, Japan relied heavily on nuclear power. After the meltdown, the country shuttered most of its reactors and turned to a massive import of liquefied natural gas and coal. Today, Japan is one of the world's largest importers of fossil fuels, a situation that drains the national treasury and compromises energy security.
Geothermal is the obvious solution. It is a baseload power source — it runs 24/7, unaffected by weather or time of day — unlike solar or wind. However, 80% of Japan's geothermal potential lies within the borders of national parks, near hot springs and volcanoes. The onsen industry, a sacred pillar of Japanese culture and tourism, has historically blocked geothermal development. Their fear is twofold: that drilling might drain their hot springs, and that the industrial footprint of a power plant would ruin the aesthetic of their mountain retreats.
According to a 2025 risk assessment published in Sustainable Energy Research, the primary failure of past projects has been a lack of "social license" — specifically, the failure to secure consent, transparent monitoring, and fair benefit allocation with local stakeholders.
Enter Furusato Netsuden and the "Waita Model."
Part 2: Anatomy of a Deal – The Waita Model
The narrative changed in 2011 in the small town of Oguni, Kumamoto. A local limited liability company called Waita-kai LLC was formed by residents. They decided they wanted to control their energy destiny. They partnered with a developer, Furusato Netsuden — a name that poetically combines "hometown," "heat," and "electricity" — to build a plant with the community, not around them.
The Partnership
In 2025, Baseload Capital made a strategic investment in Furusato Netsude. It was a classic "patient capital" move. Baseload brought the financial firepower — backed by
Waita No. 1, a 2 MW facility, came online in 2025 as the proof of concept. Waita No. 2, with 4.995 MW of capacity, was commissioned in March 2026 as the commercial scale-up.
How It Works – The Financial Engineering
In a standard energy project, a foreign developer extracts resources, sells the power to the grid, and repatriates the profits. Locals see the industrial equipment but not the cash.
In the Waita Model, the community holds equity. A portion of the revenue from the electricity sold to the Kyushu Electric Power grid is reinvested directly into the local economy. Land rights are protected, and environmental monitoring data is shared openly in community meetings.
Kazuyuki Akaishi, manager at Furusato Netsuden, told the press: "Japan does not lack geothermal resources. What it has often lacked is a development model that communities feel a part of."
For Baseload Capital CEO Alexander Helling, this is the strategic unlock. "It is important because it shows that geothermal development in Japan can be done in a way that creates local confidence, aligns incentives, and becomes repeatable," Helling said in a statement following the commissioning. "It changes the conversation from an isolated project to a long-term market potential."
Part 3: The Money Trail – Bill Gates and the War Chest
Baseload Capital is not a scrappy startup drilling in the dark. It is a well-capitalized machine. While the news of the plant opening has just broken, the company's financial health explains how they got there.
In the 24 months leading up to the Waita No. 2 launch, Baseload Capital aggressively fortified its balance sheet.
In the spring of 2025, Baseload secured a $25 million credit facility from London-based Sustainable Development Capital. This was earmarked specifically for commissioning new geothermal power plants. Shortly after, the company raised an additional $24 million in a convertible loan round.
The investor roster reads like a who's who of the energy transition. Breakthrough Energy Ventures, founded by Bill Gates, remains the cornerstone investor. Google is a major strategic partner, interested in 24/7 carbon-free energy for its data centers. Chevron Technology Ventures, the US oil major, is using geothermal as a hedge for the energy transition. And Baker Hughes, the energy technology giant, provides deep drilling expertise.
This $49 million war chest, excluding equity, allows Baseload to de-risk the exploration phase. Drilling is the most expensive part of geothermal; you spend millions to see if the heat is there. Baseload's model uses lower-temperature "binary cycle" technology — pioneered in Iceland and the United States — which allows them to generate power from resources that traditional high-heat plants would ignore.
Part 4: Why 2026 is the Year of Geothermal in Japan
The commissioning of Waita No. 2 is perfectly timed with a massive shift in Japanese energy policy.
In February 2025, the Japanese cabinet approved the 7th Strategic Energy Plan. For the first time, it explicitly named "next-generation geothermal" — supercritical and closed-loop systems — as a technology that could expand potential by four times the current estimate.
Furthermore, the government has set a specific target: 1.5 gigawatts of geothermal by 2030 and a long-term vision of 7.7 gigawatts by 2050.
However, Baseload Capital is not waiting for the next-generation tech, as supercritical drilling is still experimental. They are maximizing the current generation through efficiency and economics.
In a December 2025 interview with Japan's Nikkei business daily, Helling admitted a major hurdle: development costs in Japan are more than double those in Iceland. The solution is standardization.
By partnering with Furusato Netsuden, Baseload aims to build five new plants over the next decade, adding roughly 30 megawatts of capacity. This "cookie-cutter" approach — repeating the Waita Model across different prefectures — lowers legal fees, engineering costs, and financing risks.
Part 5: The Google Effect – Powering the AI Revolution
There is another, more modern driver for this growth: data centers.
The explosion of artificial intelligence requires massive data centers. These centers need electricity 24/7. They cannot rely solely on solar, which doesn't work at night, or wind, which doesn't always blow. In the ESG world, they cannot use coal.
Google, an investor in Baseload Capital, is on a mission to run its data centers and offices on 24/7 carbon-free energy by 2030. Baseload's geothermal portfolio is a direct vehicle for that ambition.
Kazuyuki Akaishi noted in the Nikkei interview that supplying power to data centers provides "further momentum" for business expansion. For the Japanese government, this is a double win: energy independence and becoming a hub for AI infrastructure.
The timing is crucial. As Microsoft, Amazon, and Google race to build cloud regions across Asia, Japan is positioning itself as the premium location for sustainable AI compute. But without baseload renewable power, these data centers would have to connect to a grid still heavily reliant on LNG and coal. Geothermal closes that gap perfectly.
Part 6: The Global Vision – From Kyushu to the World
While the Kumamoto plant is generating megawatts, Alexander Helling is thinking about network effects.
Baseload Capital operates like a holding company. Its structure is unique in the green energy space. It uses a central treasury in Stockholm to raise funds via green bonds and equity. It then deploys those funds to its local operating companies: Baseload Power Japan, Baseload Power Iceland, Baseload Power US, and Baseload Power Taiwan.
Historical allocations from their green bond proceeds tell the story: Iwana Power in Japan's Oita prefecture received substantial investment. Vimmerby Power in Taiwan received backing. Fludaorka in Iceland received funding as well.
The strategy is essentially to treat geothermal like software. They have developed a playbook for de-risking local opposition — the Waita Model — and a playbook for financing — the Breakthrough Energy and green bond model.
But the risks are real. It is not all smooth sailing. The academic literature warns that induced seismicity, or earthquakes caused by drilling, remains a consequential risk. Furthermore, as Baseload scales, maintaining the authenticity of the "community-first" model across different cultures and regulatory environments will be a serious challenge. What works in Kumamoto may not work in Hokkaido, and what works in Japan may fail miserably in Taiwan or the United States.
Helling is aware of this. In a 2025 interview with a European energy podcast, he emphasized that Baseload does not see itself as an extractor but as a long-term steward. "We don't flip assets," he said. "We hold them. We operate them. We live with the communities for decades. That changes how you behave."
Part 7: The Competitive Landscape – Who Else is Chasing Japan's Heat?
Baseload Capital is not alone in recognizing Japan's potential. The geothermal gold rush is quietly accelerating.
Mitsubishi Materials and Sumitomo Corporation, two of Japan's oldest industrial houses, are reinvesting in domestic geothermal after decades of looking overseas. And a host of smaller startups, many of them spun out of Japanese universities, are experimenting with supercritical drilling and enhanced geothermal systems.
What sets Baseload apart is its financial structure and its explicit community-equity model. Most competitors either operate as pure engineering firms — building plants and then selling them to utilities — or as large industrial conglomerates that struggle to gain local trust. Baseload has positioned itself as the "gentle" developer: smaller footprint, revenue sharing, and a visible commitment to staying for the long haul.
The proof will be in the pipeline. If Baseload can secure permits for five more plants in the next three years, they will become the undisputed leader in distributed geothermal in Japan. If they stall, the larger incumbents will likely copy their community model and crush them with scale.
Part 8: The Technical Edge – Binary Cycle and Lower Temperatures
A word on the technology itself, because it matters.
Traditional geothermal plants require extremely high temperatures — often above 180 degrees Celsius — to flash water into steam and spin a turbine. These high-temperature resources are rare and almost always located in remote, protected volcanic zones.
Baseload Capital uses binary cycle technology. In a binary plant, hot geothermal water flows through a heat exchanger, transferring its heat to a secondary fluid with a much lower boiling point, such as isobutane or pentane. That secondary fluid vaporizes and spins the turbine. Then it condenses and repeats the cycle.
The genius of this approach is that it works at temperatures as low as 75 to 100 degrees Celsius. Suddenly, resources that were previously considered "waste heat" become viable power sources. And because the geothermal water never touches the turbine, there is no corrosion or scaling — two of the biggest operational headaches in traditional geothermal.
Binary cycle plants also have a smaller physical footprint. They can be built on a fraction of an acre, with no visible steam plumes, making them much more palatable to local communities and national park authorities.
This technical edge is Baseload's silent weapon. While competitors fight over the few remaining high-temperature sites, Baseload is quietly developing the vast middle ground of warm water resources that everyone else ignored.
Part 9: What Comes Next – The 2030 Roadmap
Looking beyond Waita No. 2, Baseload Capital has a clear five-year roadmap.
First, they will complete and commission the Iwana project in Oita Prefecture, which has faced some permitting delays but is now back on track. Second, they will identify three to five new sites in Kyushu and Tohoku, two regions with dense concentrations of low-to-moderate temperature geothermal resources. Third, they will replicate the Furusato Netsuden partnership model in other prefectures, effectively franchising the Waita Model.
By 2030, Baseload aims to have 30 megawatts of operating capacity in Japan. That may sound modest compared to a single gas turbine, but it is transformative for the distributed energy landscape. Thirty megawatts spread across six to ten small plants means six to ten rural communities receiving steady, predictable revenue for decades. It means six to ten local utilities with baseload renewable power. And it means a template that can be exported to Indonesia, the Philippines, Chile, Kenya, and anywhere else where heat flows close to the surface.
Helling has been careful not to overpromise. "We are not trying to replace the Japanese grid overnight," he said in a recent shareholder letter. "We are trying to prove that small-scale, community-owned geothermal works. Once we prove that, the capital will flow, and the scale will follow."
Part 10: Conclusion – A New Dawn for Baseload Power
If this model works — if a foreign-backed firm can generate profit while genuinely empowering local Japanese communities — it will be replicated across the Pacific Ring of Fire. Indonesia has 40 gigawatts of potential. The Philippines has 4 gigawatts. Chile has massive untapped resources along its volcanic spine. East Africa's Rift Valley sits on a geothermal bonanza.
For now, the data is encouraging. The plant is online. The checks from Bill Gates and Chevron have cleared. And in the misty mountains of Kumamoto, a village is getting a revenue stream that will last for decades, powered by the heat of the earth.
As Helling succinctly put it: "The Earth's heat can deliver renewable energy 24 hours a day, 365 days a year. So, it is no wonder more and more large investors see the potential in what we do."
The quiet revolution has begun. And it started in a hot spring town in southern Japan, where a Swedish CEO, a local manager, and a community decided to share the wealth beneath their feet.
Source : Impact Loop, Renewables Now,
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