A senior APAC representative for Fluence has said that “a significant amount of capital” is expected to be invested in Japan’s battery storage market.
Following the company’s announcement of a battery energy storage system (BESS) trading and optimisation partnership in the East Asian country, Energy-Storage.news heard comments from Andrew Kelley, Fluence’s general manager for Japan and APAC digital and commercial services.
The US-headquartered battery energy storage system (BESS) technology and energy software services provider announced its partnership with Japanese energy resources aggregator and trader ENERES, on Monday (21 July).
The Memorandum of Understanding (MoU), signed in June before its public reveal this week, will see the pair offer battery storage asset owners an integrated solution based on the ENERES distributed energy resource management system (DERMS).
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“We will complete technical integration and commence providing a fully integrated solution for the first project before the end of the year,” Andrew Kelley told Energy-Storage.news.
Kelley said Japan is an emerging and exciting, but complex, market for BESS trading. The company hopes to complement local partner ENERES’s experience in Japanese electricity markets with commercial and technical know-how of battery storage market operation from other regions, including Australia and the US.
“The partnership includes both technical and commercial collaboration. The parties will integrate the Fluence Mosaic optimisation solution into ENERES’s aggregator systems, which will improve BESS profitability and operational efficiency for traders,” Kelley said.
In addition, the combination of the two companies’ aggregation services will enable that “fully integrated solution for operating and trading BESS in Japan,” he said.
The announcement comes amid a wave of activity in Japan’s energy storage market. The country’s government has formally recognised the technology’s role in enabling higher shares of renewable energy and stabilising the mountainous island country’s network of grids.
‘Grid stability a key value driver of batteries in Japan’
In the first part of ESN Premium’s deep dive into the Japanese market, published last week, with the second part to follow tomorrow, we heard from developer Eku Energy that there are now two national subsidy schemes for BESS capex support, a low-carbon capacity market and perhaps most importantly, the ability to stack revenues from ancillary services and wholesale trading.
“Grid stability is a key value driver of batteries in Japan,” Fluence’s Andrew Kelley said.
“Due to Japan’s island topography, increasing renewable penetration and low reserve margin, it renders it vulnerable to reliability and system stability challenges. In addition, Japan’s grid topology shows numerous voltage and frequency levels, causing the need for reforming the energy.”
As noted by BloombergNEF (BNEF) analysts Umer Sadiq and Isshu Kikuma in the ESN Premium piece, negotiating the market opportunities these drivers have so far translated into is, however, very complex. Market design, regulations and policy continue to evolve, with changes often coming fairly rapidly.
Fluence’s Andrew Kelley said these complexities mean there is heightened demand for optimisation software that can “effectively and efficiently operate BESS to maximise performance.”
Fluence is one of the best-known names in the global energy storage space, perhaps primarily for its integration and manufacturing of modular BESS solutions. However, it also has two software offerings: the AI-powered bidding optimisation platform Mosaic and asset management platform Nispera.
The US company, publicly listed on the Nasdaq exchange and majority-owned by AES and Siemens, launched its latest hardware solution, SmartStack, and the Mosaic software platform, to the Japanese market in February.
While it has yet to announce any hardware deals in the country, Kelley said Fluence expects to offer the same bundling of hardware and software solutions in Japan that it already does in other markets.
“We expect there to be a significant amount of capital directed towards the BESS market in Japan, and we are excited to offer both our energy storage and digital products into the Japan market, to enable Japan’s shift to renewable energies,” Kelley said.
