Regional power utilities in Japan are stepping up efforts to support the country’s transition to clean energy by actively participating in large-scale battery energy storage system (BESS) projects.
Kansai Electric Power Company (KEPCO), based in Japan’s southern-central Honshu region, and Kyushu Electric Power Company (Kyuden), serving Japan’s southernmost major island, Kyushu, both announced their involvement in new grid-scale BESS initiatives last week (May 7 and May 8, respectively).
These developments come as Japan continues to adapt its electricity market regulations to support energy storage. A key policy change introduced a few years ago officially defined storage systems as grid-connected generation resources, enabling their integration into the national energy infrastructure.
To further incentivize development, Japan launched a subsidy program offering capital expenditure support for up to one-third of project costs. Projects located in Tokyo can also qualify for an additional subsidy of up to 50% from the Tokyo Metropolitan Government.
Beyond subsidies, battery storage facilities now have access to multiple market revenue streams, including participation in balancing markets, wholesale power trading, and capacity auctions. Notably, 1.3GW of battery storage projects were awarded contracts in the FY2024 Long-Term Decarbonisation Power Source Auction (LTDA), demonstrating growing interest and investment in the sector.
Japan’s expanding battery storage capabilities aim to enhance energy security, stabilize the grid, and support the broader goal of decarbonization.
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