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Macquarie-backed Eku Energy closes first Japan battery storage project with Tokyo Gas offtake contract


Battery storage developer Eku Energy has partnered with utility Tokyo Gas on a grid-scale energy storage project in Japan, with construction expected to start soon.

The developer, jointly owned by a fund managed by Macquarie Asset Management’s Green Investment Group (GIG) and institutional investor British Columbia Investment Management, announced the project today (24 April).

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It is Eku Energy’s first project in Japan to reach financial close and will be located in Miyazaki City, the capital of Miyazaki Prefecture on the southern island of Kyushu. The 30MW asset will be 4-hour duration (120MWh), and a 20-year offtake agreement is in place with Tokyo Gas.

Eku will own the project, with Tokyo Gas having full operating rights for the term of the agreement. Eku Energy is actively developing assets in the UK, Australia, Italy, and now Japan. Construction will begin in the second half of this year with an expected commercial operation date in 2026.      

It is also the first standalone battery storage project in Japan for project finance provider MUFG Bank, although the banking group has financed multiple projects in other territories including the US and Europe. MUFG was also involved in financing an offshore wind project in northern Japan which included a battery storage component, in development by US company Pattern Energy.

Japan’s grid-scale battery storage market has been relatively slow to take off, with relatively limited revenue opportunities that focus largely on ancillary services, with some capability of earning money through the JEPX power exchange spot market.

There are also some subsidy schemes in place. These have variously been described as complex and not as lucrative as in other territories, although useful for promoting awareness of battery storage as an asset class.

However, in light of the government’s recently introduced ‘green transformation’ (‘GX’) strategic policy, investments in renewable energy are poised to ramp up. This means battery storage will be a key technology, along with industrial demand response and aggregated virtual power plants (VPPs), in managing volatility on the country’s electricity grids.

There are also newly introduced low-carbon capacity market auctions. According to Japan-based independent expert Shunsuke Amanai, JEPX has a cap on imbalance which is temporarily set at JPY80/kWh (US$0.51/kWh), but this is set in the coming years to be raised to JPY200/kWh and then JPY600/kWh. has reported in recent months on a succession of major names in Japanese and international business making moves in the battery storage space, including, but not limited to, UK battery storage investment fund Gore Street in partnership with Japanese corporation Itochu, Chinese battery and storage system maker Gotion High Tech with Japanese investment bank Daiwa, and Japanese conglomerate Marubeni.

Another of the country’s major trading houses, Sumitomo Corporation, is reportedly looking to invest around US$1.3 billion in a portfolio of battery energy storage system (BESS) assets around wind and solar PV plants, according to a report from Japanese news outlet Nikkei Asia today.

In related news, today, the Tokyo Metropolitan Municipal Government announced details of its own battery storage subsidy scheme, set to run from this year until 2030, with a budget of JPY13 billion (US$84 million) in total and open to entities with either head or branch offices registered in the nation’s capital. It is understood Gore Street Energy Storage Fund and Itochu will be advising the Tokyo government on that scheme.

This article has been amended from its original form to more accurately reflect information about JEPX market pricing.’ publisher Solar Media will host the 2nd Energy Storage Summit Asia, 9-10 July 2024 in Singapore. The event will help give clarity on this nascent, yet quickly growing market, bringing together a community of credible independent generators, policymakers, banks, funds, off-takers and technology providers. For more information, go to the website.

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