Third Week of June, 2022 Japanese Power Market News

Development of power grid battery systems picking up in Japan.

The development of both front-of-the-meter battery systems and behind-the-meter large scale renewable+battery assets has been slow to get going in Japan. Major hurdles have included a lack of familiarity with monetization options among asset developers and investors, a lack of adequate financial modeling capabilities, and unclear regulations. 

METI now appears keen to address this. In a June 7th report on its long-term plan for renewable capacity development in Japan, the agency announced that by the end of FY2022, it would clarify regulations pertaining to the integration of batteries on the grid and in renewable assets. This will include clarifying which categories can participate in the capacity market and integration with the non-FIT renewable certificate system. It will also involve the modification of FIP rates and storage metering. The clarifications will be welcomed and should help market players move forward with their investment decisions. 

Some companies are already acting, spurred by rising curtailment rates at some renewable facilities. As reported on June 13th by PV magazine, Mitsubishi Corp, Kyushu Electric, and NTT anode energy have teamed up to add storage assets in Kyushu, with the first to be a 4.2MWh battery facility due onstream in February 2023. Kyushu's curtailment rates for solar and wind reached 4.4% last year, improving the business case for battery systems. 

Mitsubishi built this rooftop solar-plus-storage system. Image: Mitsubishi

Sources: METI report June 7th, Japanese solar building up resiliency against curtailment (Pv-magazine, June 13th)

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