Regular readers of Energy-Storage.news will likely be aware that grid-scale battery storage activity in Japan has shown early signs of being on an upward trend, with major Japanese players and foreign market entrants developing projects or forming various joint ventures (JVs) to seek out project opportunities.

However, announcements on the scale of the BESS plant Gurin Energy is proposing have yet to be seen in the sector. The first two battery storage assets to begin trading power on the Japan Electric Power Exchange (JEPX) spot market are sized at 2MW/8MWh each, for example, and even among larger projects announced in the months since, anything above 100MWh is rare.

The fundamental drivers for larger projects are there, Franck Bernard, managing director of storage and flexibility at Gurin Energy tells Energy-Storage.news.

“As the fifth-largest energy consumer in the world by country, Japan has a very robust and mature power sector, and the second-largest installed solar capacity in Asia after China. In entering the Japanese market, one consideration was how we could make a significant positive impact,” Bernard says.

From the company’s own research, and conversations with partners in Japan, Gurin decided that building a BESS project would deliver the most impact, with Franck Bernard citing four major macro drivers:

Japan’s national electricity grid is actually a patchwork of regionalised grids, and those in the East and West of the country operate at different frequency, with 50Hz in operation in the eastern part and 60Hz in the West. With little to no interconnection between those regional grids, the need for flexibility to balance them is acute.

The curtailment of renewables – throttling down the output of solar PV or wind power plants when the grid is too congested to take their offered energy – is rising dramatically in Japan. For the first six months of 2023, there was already three times as much energy curtailed as in the same period of last year. Storage can mitigate this by shifting generated energy to be inputted to the grid when it is needed, not when it is produced.

Japan’s climate and renewable energy targets, which have seen policy ambitious ramp up, with the government targeting for renewables to comprise 36-38% of the national energy mix by 2030 and the achievement of net zero emissions by 2050. Integrating a higher share of renewables will necessitate storage.

Japan already has what Bernard describes as a “vibrant and advanced local ecosystem of energy storage technologies,” with Toshiba Mitsubishi-Electric Industrial Systems Corporation (TMEIC), a JV between Japanese industry giants Toshiba and Mitsubishi, already tapped to provide the BESS equipment for Gurin Energy’s project. Another Japanese company, Nippon Koei, is carrying out engineering consulting services and Nippon Koei has experience on battery storage projects overseas in markets including the UK and continental Europe.

Build, scale or curtail

The drivers are big enough that Gurin Energy appears confident of the business case for its project, even though it has yet to select a site across regions in two northern Japanese prefectures, Fukushima and Tochigi.

Land availability is at a premium in Japan, with about 70% of the country’s land mass taken up by forests, mountains, or both. This has lead to restricted opportunities for new large-scale solar PV in recent years, and Bernard acknowledges that this is a challenge, noting that Gurin Energy needs its chosen site to be “between 10-15 hectares with proximity to the grid”.

Another problem solar developers have had is in running into community opposition to their projects, with some cases reported of ancient forests being cleared or good quality agricultural land being turned over to power generation. Bernard said Gurin Energy will choose a site on either existing or former industrial land and avoid using agricultural land or nature spots while also rehabilitate industrial sites.  

“We believe that the Japanese market is ready for a scale-up of energy storage solutions, as the number of curtailments this year alone shows,” Bernard says, discussing Gurin Energy investing in a project so much larger than anything else seen in the country, and indeed, larger than what’s typically been seen even in more mature markets.

“With our Japanese partners, we believe we can deliver the biggest positive impact by supporting Japan’s efforts in this space, which is why energy storage is a priority for us in this market right now.”

‘A number of potential buiness models’

As noted in our recent coverage of the Japanese market, the fundamental need for energy storage has become apparent, but the revenue streams needed to monetise the value energy storage provides are at their early stages of being established.

JEPX offers a route to revenues through energy arbitrage, but ancillary services opportunities are limited. This is set to change in the coming months, with new services expected to be rolled out. There is also a new capacity market structure incoming, which will include auctions for low carbon capacity that will likely play to the strengths of energy storage. Capacity market auctions are set to begin next year to contract for delivery from 2027.

“There are a number of potential business models, each with their own related revenue stream, that we looked at in the planning of the BESS,” Bernard says.

“The most common being to go to the wholesale market for energy sourcing and flexibility offtake. Then there is the capacity market, which makes sense for a battery the size of the one we are planning to build. Finally, a tolling agreement where the electricity supplier and off taker are the same entity.”

The Japanese government has said it will promote energy storage deployment and has rolled out subsidy schemes, while regulators continue to build on the progress made in opening up energy trading for grid-connected BESS.

Bernard says Gurin Energy has identified a number of other opportunities in Japan in addition to the 2GWh BESS project in Fukushima and Tochigi, and the developer’s local team in Tokyo “will continue to explore these opportunities further”.

Energy-Storage.news’ 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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However, market rule changes for storage and renewables can leave asset owners scrambling to understand and accurately react to these new rules in a timely manner – and failure to successfully navigate these changes can bring lost revenue, among other risks.

In this webinar, we learn about:

Best practices for navigating wholesale energy market bidding rule changes for energy storage and renewables

The challenges of manual bidding and the importance of selecting the right AI-powered optimisation software to reduce risk and maximize revenue

How the right partnerships and open lines of communication can ease the process of navigating market bidding rule changes

Speakers:

Alva Svoboda, principal of market design integration, PG&E

Drew Skau, principal product manager, Fluence

Presentations from the speakers is followed by a panel discussion-style interview moderated by Energy-Storage.news editor Andy Colthorpe, and the webinar concludes with an audience Q&A.

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You can also access the recording of this webinar ‘How to navigate changing energy market rules for energy storage and renewables,’ as well as many others on-demand at the site and receive presentation slides (registration required), at the site here.

Watch our previous webinar with Fluence, ‘How industry leaders optimise renewable and energy storage asset performance’.

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On.Energy said its projects, grouped under the name ‘Palo Verde Projects’, will come online in Q3 2024 while Jupiter Power didn’t provide a commercial operation date (COD) for its larger system.

Jupiter Power

“Jupiter is excited to have closed financing for this very unique project, which answers the call from the Texas Legislature to build more dispatchable power in ERCOT and near major load centres where consumers need it the most,” said Andrew Bowman, CEO of Jupiter.

The announcement follows Jupiter and First Citizens’ recent collaboration for a similarly-sized facility for a two projects totalling 320MWh, also in ERCOT, covered by Energy-Storage.news in July.

On.Energy

On.Energy meanwhile said that its financing package also includes an investment tax credit (ITC) transfer deal, possible under the Inflation Reduction Act’s new transferability mechanism.

The company said the financed portfolio included greenfield development projects as well as some acquired in mid-2023, and is part of a larger 1GWh pipeline in Texas, California ‘and beyond’, with a follow-on portfolio of projects totalling 160MWh expected to reach COD in Q3 2025.

On.Energy CEO Alan Cooper talked Energy-Storage.news through the company’s move in focus from its core markets in Latin America to the US, in May (Premium access).

“On.Energy has closed a capital solution for our assets at a time when many are still trying to sort out the Inflation Reduction Act and its implications,” said On.Energy CFO David Fernandes, commenting on the recent financing package.

Live Oak Bank provided the construction debt as well as long-term debt financing under the United States Department of Agriculture Business & Industry loan guarantee programme.

‘Industry-first’ insurance-backed revenue floor for BESS

The announcements by On.Energy and Jupiter Power coincide with one from risk transfer solutions firm New Energy Risk and software and consulting firm Ascend Analytics which they claimed is an industry-first.

The companies have closed an energy storage insurance policy which will provide coverage for the performance of Ascend’s battery storage forecasting and bidding optimisation platform. It will enable the platform to provide a revenue floor for a project over a multi-year term.

It will differ from other revenue risk transfer solutions in that it offers minimum revenues while allowing the project access to upside revenue from lucrative, high-volatility events in ERCOT. A revenue cap, for example, would reduce this ability.

And with ERCOT BESS projects often making most of their year’s revenue from a few, high-volatility events, that could be significant.

Energy-Storage.news’ publisher Solar Media will host the 5th Energy Storage Summit USA, 19-20 March 2024 in Austin, Texas. Featuring a packed programme of panels, presentations and fireside chats from industry leaders focusing on accelerating the market for energy storage across the country. For more information, go to the website.

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This tender will support 800MWh of projects in both South Australia and Victoria, with the remaining 800MWh of capacity to be allocated to either state. Selected projects will deliver “clean, dispatchable capacity to the electricity grid before the end of 2027”.

The Australian Energy Market Operator (AEMO), together with its subsidiary AEMO Services, will administer the tender on behalf of the Australian government and offer recommendations. After AEMO makes its recommendations, the Australian government will select the projects to receive revenue support under the CIS.

Submission of project bids will end on 23 February 2024. The financial value of the bids will be assessed at the end of April 2024, and successful bids will be announced in the middle of next year.

Based on a Contracts for Difference (CfD) structure, the CIS has been described as one of the most significant developments ever seen in Australian electricity policy and the government has committed to underwriting 32GW of renewables through it.

To read the full version of this story visit PV Tech.

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The transformation involves a shift from fossil-based energy systems to renewable sources in production, transmission, consumption, and storage. The Huawei Global Industry Vision Report anticipates that over 50% of global power will be generated from renewable energy by 2030; and the accumulated global energy storage capacity is expected to reach 358GW, increasing more than 20 times over within 10 years.

As renewable energy gains prominence in the energy system, the electric power industry becomes a critical battlefield in the ongoing transition. Variable renewable energies like solar PV replace fossil energy at the generation end, while the integration of new power loads like electric vehicles poses a significant threat to system balance at the consumption end.

Realising the ambitious transformation demands collaborative efforts, Enlit Asia 2023, the leading regional annual conference took place from November 14 to 16 in Jakarta, Indonesia, co-organised with Masyarakat Ketenagalistrikan Indonesia (MKI, also known as the Indonesian Electrical Power Society),

The event brought the regional power and energy value chain together on one platform, to address the industry’s latest trends, products, and technologies.

During the event, Huawei showcased innovative electric power solutions and exchanged crucial insights on ASEAN energy transition with opinion leaders and experts from over 200 enterprises. As a chartered member of MKI, Huawei is committed to harnessing digital technologies to accelerate the energy transition across the Asia-Pacific (APAC) region.

Driving green and digital transformation through collaboration

Home to 61% of the world’s population, APAC countries are speeding up on the dual transformation journey. National strategies like Digital Indonesia, My Digital in Malaysia, and Digital Hub in Thailand are building strong digital foundations, accompanied by commitments such as Thailand’s aim for carbon neutrality by 2050 and Indonesia’s target of Net-Zero Emissions by 2060.

Nicolas Ma, Huawei Asia-Pacific Enterprise Business Group president. Image: Huawei

Although APAC countries are at different phases of energy transition, ‘green and digital’ must be the driving force behind ASEAN’s economic momentum.

This ambitious pathway will require close collaborations across all sectors. Governments and public entities play a crucial role in establishing a conducive environment through policies, while financiers, investors, and businesses of all sizes contribute through green finance and carbon trading markets.

Furthermore, technological innovations in digital and energy sectors will serve as key enablers throughout the process. Numerous communities and platforms arise within the energy industry, bringing together stakeholders to enhance discussions about energy transition. One notable entity in this landscape is MKI, which aims to create a communication and consultation forum that strengthens synergy in enhancing the efficiency of environmentally-friendly national electrical power since 1998.

Through initiatives like The Indonesia National Electricity Day, MKI shapes opinions to develop the electrical power industry. Huawei consistently participates in MKI events and forums, working collaboratively with stakeholders in the region to bolster ASEAN’s energy transition.

Empowering the Asia-Pacific energy transition in three dimensions

Dedicated to accelerating the green and digital energy transition, Huawei commits to contribute in the electric power industry in three significant ways.

i. Innovation in cutting-edge electric power solutions

According to Wood Mackenzie, the Asia-Pacific region is set to embark on a decade of renewable energy transformation (2021-2030) with a projected investment of US$1.3 trillion in wind and solar generation. To tackle challenges from the introduction of new energy, the industry requires robust digital capabilities, including widespread connectivity, a dependable communication network, and formidable computing power. In response, Huawei is committed to bring innovative technologies for the smart power system, viewing digitalisation as the remedy for these pressing issues.

As a global ICT provider, we offer three types of electric power solutions. Firstly, we provide scenario-based industry digitalisation solutions, including intelligent power plant, intelligent power transmission line inspection, and power distribution IoT to enhance operational and maintenance (O&M) efficiency.

Our digital space security solutions ensure reliability through anti-interruption measures, anti-attack mechanisms, and anti-ransomware measures, serving as a robust last line of defense for data security. Lastly, we contribute to green and low-carbon development through innovations in digital power solutions, such as smart microgrid and battery energy storage systems.

Our intelligent electric power solutions have proven to be beneficial to various energy companies across Asia-Pacific.

In Macao SAR, China, we collaborated with Companhia de Electricidade de Macao (CEM), to enhance its communication network reliability and reduce the learning and maintenance costs.

In Indonesia, we assisted Perusahaan Listrik Negara (PLN) in establishing a secure storage environment to bolster its smart meter workflows.

In Thailand, our smart grid solution helped Provincial Electricity Authority (PEA) upgrade their wireless communication infrastructure for lower latency and increased connectivity.

ii. Cultivating digital talent for the electric power industry

To propel the energy transition’s forward progress, it is imperative to have experts well-versed in both electric power industry knowledge and digitalisation skills. First, our experts will collaborate with enterprises, companies, and eco-system partners to facilitate a professional growth with practical electric power scenarios. As the first wave of seed talents identifies essential digital capabilities, we implement a certification system linked to their career development.

With the belief that wisdom resides among the people, we reduce the threshold for digitalisation. Our Seeds for the Future, ASEAN Academy, and ICT Academy have trained over 200,000 digital talents in Asia-Pacific, encouraging widespread participation and creativity.

Meanwhile, we aim to empower partners to precisely meet customer requirements, efficiently resolve issues, and agilely deliver solutions. This year, Huawei unveiled a US$200 million incentive for Asia-Pacific partners, allocating US$55 million for partner capability development.

Two joint innovation OpenLab facilities were inaugurated in the region (OpenLab Asia-Pacific in Singapore and OpenLab Bangkok in Thailand). Both OpenLabs aim to facilitate customer and partner enablement, uniting local partners to conduct proof-of-concept testing and develop scenario-based electric power solutions according to APAC business scenarios and customer requirements.

iii. Accelerating digital transformation of the electric power sector with top industry players

We aim to continuously accelerate the digital transformation of the electric power sector through strategic collaboration with top industry players and set up the good reference in the region.

Since 2013, Huawei and PLN have collaborated hand in hand, striving together to forge a green and digital Asia-Pacific. The launch of the Joint Innovation Center (JIC) programme at Enlit Asia marks a significant milestone of the 10-year partnership, signifying a stronger readiness for APAC energy transition.

Official launch of the Huawei-PLN Joint Innovation Center at Enlit Asia. Image: Huawei

Bringing together experts from research and development, sales, marketing, service, consulting, and key partners in the electric power industry, JIC is envisioned as an outstanding eco-platform. Here, both parties can collaboratively develop new products, solutions, and drive the digitalisation of electric power and FTTH (Fiber to the Home) businesses.

Beyond its role in innovation incubation, JIC will serve as a hub for exhibitions and capability development. This dual-purpose approach aims to assist PLN in enhancing its digital capabilities while showcasing the collective achievements of both parties.

Uniting for green and digital prosperity in Asia-Pacific

Collaborating with more than 20 leading electric power companies across 12 countries in the region, we are deeply rooted in Asia-Pacific. United at the crossroads of a transformative era, let’s jointly strengthen the energy landscape, catalysing digital empowerment across the power industry for enhanced efficiency, resilience, and sustainability. This collective mission shapes a fully connected and intelligent APAC—a beacon of progress for generations.

About the Author

Nicolas Ma is President of Huawei Asia-Pacific Enterprise Business Group. Nicholas has held various positions at Huawei in different regions throughout his tenure with the company. He has 15 years of experience in the telecommunications industry. Prior to his current role, he was the Deputy Chief Executive Officer of Huawei Philippines from 2014 to 2018 (Nov), and the Chief Executive Officer of Huawei International since Dec 2018.

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The project will be built on a site owned by utility Unitywater and will be equipped with Tesla Megapack BESS units. Engineering, procurement and construction (EPC) duties will be carried out by Consolidated Power Projects (CPP).

CPP said in a separate announcement that its scope of work includes designing and constructing the BESS coupled with a 33kV/110kV substation which will connect to transmission operator Powerlink’s 110kV network through Powerlink’s existing substation at South Pine.

CPP said that the design is already at an “advanced” stage due to an early works agreement having been in place, which means that work on site can begin in March 2024, and CPP expected the first batteries to be energised in July 2025.

The BESS will operate on a merchant basis in the National Electricity Market (NEM), trading its stored capacity in frequency control ancillary services (FCAS), energy arbitrage, contingency and other opportunities.

The NEM, to which Queensland’s electricity grid is connected as well as those of five other Australian states, has been identified as one of the world’s most volatile electricity markets in terms of pricing dynamics, driving a strong business case for large-scale batteries.

Ulinda Park project meets grid performance standards

A day after the Brendale FID announcement, another Akaysha Energy project in Queensland was revealed to have taken a key step forward.

Generator Performance Standards (GPS) approval has been granted for Akaysha Energy’s 150MW/300MWh Ulinda Park BESS, in Queensland’s Western Downs region. The developer took its FID on Ulinda Park a couple of months ago.

GPS are specific performance standards all generators must adhere to and are included in the register of standards held by the Australian Energy Market Operator (AEMO), which oversees the NEM and Australia’s other major electricity markets.

The standards are considered to be particularly stringent by international standards. Approval was announced by Akaysha Energy together with US-based BESS system integrator Powin Energy and power conversion system (PCS) maker Eks Energy.

Powin will be supplying and integrating the BESS at Ulinda Park, just as it is supplying and integrating BESS equipment for Akaysha Energy’s most famous project, the 850MW/1,680MWh Waratah Super Battery in New South Wales. Consolidated Power Projects is also working on those other two in addition to Brendale, which of course has a different BESS supplier.

Powin bought Eks Energy in 2022 and in fact Powin leadership has said its acquisition of Eks was largely due to the Spain-headquartered power electronics manufacturer’s expertise with inverters for weak grid or grid edge environments, which would be an advantage in designing projects to meet Australia’s strict grid codes. Incidentally Hitachi Energy recently swooped to acquire a controlling stake in Eks, although Powin is thought be retaining a “significant ownership stake”.     

Akaysha Energy recently also entered a partnership with Japanese conglomerate Itochu, with the pair seeking to work on grid-scale projects in Japan’s nascent battery storage sector. In addition to Ulinda Park and Brendale, Akaysha is also developing Wurdong BESS, a third project in Queensland, which it plans to equip with up to 400MW/1,600MWh of batteries.

Energy-Storage.news’ publisher Solar Media will host the 1st Energy Storage Summit Australia, on 21-22 May 2024 in Sydney, NSW. Featuring a packed programme of panels, presentations and fireside chats from industry leaders focusing on accelerating the market for energy storage across the country. For more information, go to the website.

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Secure Solar Futures has signed a 25-year solar PPA with the Tazewell Four Seasons YMCA to develop a 483 kW power system, providing the facility with on-site solar at no upfront capital cost.

Located in Tazewell, Virginia, the Four Seasons YMCA community programming includes sports camps for children, group fitness classes for all ages and medical screenings.

“Going solar supports our mission,” said YMCA CEO Shawn Durham. “It will save us money that we can put back into programs for the community while also doing our part to help the environment.”

The array will contain 912 panels manufactured by Jinko Solar, which Secure Solar Futures will install on land adjacent to the YMCA building. After installation, the company will own, operate and maintain the solar equipment and sell the clean energy produced to the YMCA for the PPA’s term.

Over 25 years, the solar system is expected to produce 15,212,832 kWh of electric power, which at the YMCA will cover 98.5% of the facility’s demand. 

At the PPA’s conclusion, the YMCA will take ownership of the system at no additional cost, producing its own energy for the remainder of the equipment’s expected 35- to 40-year lifespan.

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John M. King

Radial Power has closed on $80 million in tax equity financing from Bank of America to support the company’s pipeline of distributed generation projects through late next year, encompassing both asset and portfolio-level turn-key integrated commercial & industrial (C&I) and community solar solutions. 

This tax equity capital raise, alongside back leverage, is planned to help fund the development and installation of an estimated 96 MW of C&I and community solar projects, as well as support real estate customers across at least nine states.

“This strategic investment will support Radial Power’s robust pipeline of low-cost, low-carbon clean energy solutions that enable offtakers to meet their ESG and sustainability goals,” says John M. King, CFO of Radial Power. “Our national portfolio of best-in-class distributed generation projects is unlocking revenues from underutilized real estate, delivering value to our customers, and  accelerating a reliable U.S. energy transition.”

This deal marks the inaugural tax equity financing Radial Power has closed with Bank of America.

“We are proud to support Radial Power in this latest milestone.  The tax equity transaction underscores Bank of America’s commitment to mobilize and deploy $1.5 trillion in sustainable finance capital by 2030, and to support the scalable and affordable delivery of clean, local power to communities, businesses and individuals,” adds Bank of America’s Danielle King.

Latham & Watkins acted as legal counsel to Radial and Milbank to Bank of America.

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Devrim Celal

Kraken, part of Octopus Energy Group, has acquired Sennen in an effort to increase the company’s contracted energy generation and storage assets.

Tech platform Kraken integrates varied aspects of the energy system, from customer billing to device management and analytics. The Sennen software uses cloud technology to streamline oversight and daily operation of renewable projects. 

The Sennen acquisition is expected to increase Kraken’s contracted energy generation and storage assets from 6.5 GW to 36 GW. It also marks the first time the platform will be managing offshore wind farms, says the company.

Sennen’s 25 employees will move to the Kraken team and continue to work from their Bristol office.

“This acquisition is a game-changer for us as we continue to disrupt the renewable energy landscape,” says Devrim Celal, Kraken CEO. “Sennen’s expertise and innovative solutions perfectly complement our mission to provide efficiency and scalability to asset managers. We are excited to join forces with Sennen’s talented team to turbocharge the move to a cleaner, cheaper energy world.”

Kraken is currently contracted to manage over 6.5 GW across over 140,000 green energy assets in 12 countries.

Sennen was advised by Roxburgh Milkins, based in Bristol.

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Gregg Felton

Altus Power has strategically acquired the core business of Unico Solar, including its development platform, pipeline and senior leadership team as well as Denver and Seattle offices.

“In a market where others are scaling back and reducing footprint, Altus Power is adding significant local coverage to be closer to our nationwide real estate partners and enterprise customers,” says Gregg Felton, Altus Power co-CEO. “The Unico Team brings deep experience developing customer relationships, particularly in the west, and now with access to our portfolio and brand, these team members will have greater resources to accelerate the flow of our pipeline.”

“Unico Solar has built a dynamic solar development platform centered on overcoming customer adoption barriers for commercial rooftop and community solar projects, largely in the western U.S.,” adds Unico Solar’s Brett Phillips. “Joining forces with Altus Power brings together market leaders in the commercial and industrial solar energy vertical that will supercharge project development for real estate owners and users on a national scale.”

As part of the acquisition, Unico Solar’s development platform and pipeline will become wholly owned by Altus Power and Unico Solar’s development team will be integrated with and into the Altus team.

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