A total of 26 battery energy storage projects in Japan have been selected for contracts through the Long-Term Decarbonisation Power Source Auction (LTDA) for 2024.
Japan’s association of grid operators, OCCTO, published the results of the 2024 LTDA on Monday (28 April), the second staging of the capacity market auction, which limits eligibility to resources including batteries, pumped hydro energy storage (PHES), nuclear, adjustable hydroelectric generation and liquid natural gas (LNG).
25 battery energy storage system (BESS) projects of ‘between’ 3-hour to 6-hour duration were awarded contracts totalling 1,322,810kW (1.3GW). One BESS project of specified 6-hour duration also won a 47MW contract, as did two PHES projects which each got selected for 180MW contracts.
The winners, which will now negotiate terms for 20-year fixed-revenue capacity contracts with OCCTO, are a mix of international and domestic companies.
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OCCTO’s announcement of selected bidders features names of subsidiaries or specific project development vehicles. As one source commented to Energy-Storage.news, it is often difficult to know which parent company is behind each bid.
Big winners included Bison Energy, a global renewable energy developer established in 2016, with a track record of solar PV projects in Japan. Bison Energy was awarded 195,753kW for three projects: one in Fukushima prefecture (129.797kW), one in Niigata prefecture (37,827kW) and one in Fukui prefecture (30,129kW).
A couple of the selected bidders contacted Energy-Storage.news to announce their wins.
US-headquartered alternative investment firm Stonepeak and Singapore-based BESS developer CHC said their joint BESS development platform’s bids had been selected for five battery projects of 348MW gross capacity. It wasn’t clear from the Stonepeak release or OCCTO announcement which projects this refers to. Energy-Storage.news has reached out to Stonepeak and CHC for further information.
This builds on the platform’s success in the previous 2023 staging of the LTDA auction, in which it was awarded contracts for 131MW.
UK-headquartered standalone BESS developer Eku Energy was selected for its 150MW/600MWh Eshi project in Okayama prefecture. This is the company’s second project in Japan, after the Hirohara BESS 30MW/120MWh project in Kyushu, on which construction began in September last year. Eku closed financing on that project with what it claimed was a ‘first-of-a-kind’ 20-year tolling deal for the Japanese market a few months earlier.
Hirofumi Sho, head of investment and origination in Japan for Eku—which has projects in development, construction and operation in markets including Australia and the UK—told Energy-Storage.news that the contract is listed as 119,266kW due to an efficiency factor calculation and refers to the entire 150MW project rather than partial nameplate capacity.
Eku Energy’s APAC technical director Nick Morley took part in a panel discussion on the Japanese market, including the LTDA auction and other paths to revenue generation for battery storage, at Energy Storage Summit Asia 2024, hosted last July in Singapore, by our publisher Solar Media.
OCCTO, or the Organization for Cross-regional Coordination of Transmission Operators to give its full name, also announced this week that a national committee has decided that a supplementary capacity market auction will be held this year.
LTDA FY2024 results (PDF, in Japanese).
This article has been amended to the correct acronym for Organization for Cross-regional Coordination of Transmission Operators (OCCTO) and to reflect that Eku Energy is headquartered in the UK, not Australia as previously stated.
