Japan’s grid-scale battery storage market offers fresh opportunities with “amazing” returns, according to GridBeyond’s market optimisation director.
Ireland-headquartered energy resource manager and optimiser GridBeyond and its Japanese partner, contract support services provider Port Inc., announced their first collaboration yesterday (26 June).
Port Inc. provides contract services to electricity and gas companies in Japan and claims to be concluding around 900,000 contracts per year. The company officially registered its entry into the energy storage business with regulators earlier this year after first registering as a power generation business.
Changes in regulations over the past couple of years have opened up electricity markets in Japan to the participation of energy storage asset operators under new definitions.
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It aims to support its customers in electricity procurement from storage facilities and has developed three equally sized 2MW/8MWh (4-hour duration) battery energy storage system (BESS) assets.
Two of those plants, in Gunma, a prefecture about 100km north of Tokyo, went into commercial operation earlier this month, while preparations for the third site are ongoing.
Port Inc., has collaborated with GridBeyond, which, using its AI-driven platforms and forecasting, aggregates and optimises the management and route-to-market activities of around 2GW of battery storage assets in markets including CAISO (California) and ERCOT (Texas) in the US and the UK and Ireland.
GridBeyond has begun energy trading from one of the 2MW front-of-the-meter (FTM) BESS projects in Gunma. An official launch event was held this week in Tokyo at the Embassy of Ireland, with Ireland’s Minister for Enterprise, Tourism and Employment, Peter Burke, among those in attendance.
“Our collaboration with GridBeyond goes beyond a technical partnership—I believe it opens up new potential for the energy market as a whole,” Port president and CEO Hirofumi Kasuga.
Kasuga added that the first deal “marks a significant step toward large-scale battery deployment in Japan,” with the companies hoping to collaborate on further projects between 2025 and 2028.
‘Amazing returns’ in Japan from ancillary services market
Speaking with Energy-Storage.news ahead of this week’s announcement, GridBeyond director of market optimisation Ali Karimian said that although the first deal is for a much smaller project than the company has become accustomed to working on within the US or Europe, the potential of the market in Japan is already visible.
“It’s a market right now, how we perceive it, is that it’s just so fresh. So far from saturation,” Karimian said.
“One major reason is that there are just not many players in it. It’s a very recently developed market; [for example] the market has just opened up for ancillary services in the last year. Everything is so new.”
GridBeyond built its first proof-of-concept (POC) bid optimiser for the Japanese market last year, Karimian said, showing that it could simulate an asset’s market participation to prospective customers and partners.
While the customers’ battery projects GridBeyond’s sales team has been presenting to are therefore much smaller than its teams elsewhere might be used to, there is a lot to be excited about, Karimian said.
“Returns have been amazing” in the past year that GridBeyond has been observing the market and preparing for entry, mainly driven by ancillary services prices. Ancillary services markets clear at very high prices, and the auctions are ‘pay-as-bid’, rather than ‘pay-as-clear’.
At the same time, the Japanese BESS market is also drawing in entrants because, as with the UK, ERCOT or CAISO, there is the ability to participate in other markets and stack revenues together with those earned through ancillary services.
There are also contracted revenue opportunities such as the Long Term Decarbonization Auction (LTDA) capacity market, as well as incentive schemes run both by the national government and the Tokyo Metropolitan Goverment which offer significant Capex support.
Read more Energy-Storage.news coverage of Japan’s energy storage market.
