Battery Storage in Japan

Background
Japan faces a huge electricity demand, traditionally met predominantly by fossil fuels. As the country aims for a
46% reduction in carbon emissions by 2030 and targets net zero by 2050, there's a clear need for a transformation
in its energy generation mix. This transformation emphasizes the integration of low-carbon generation sources,
among which renewable energy plays a pivotal role.
The Role of Battery Storage
With an increase in renewable energy sources, such as solar and wind, comes the challenge of managing their
intermittency and the resulting decrease in system inertia. Renewable energy sources do not produce a constant
output, varying with weather conditions and time of day, which creates challenges for maintaining a stable and
reliable power supply.
Battery storage technology emerges as a critical solution to these challenges. It offers the flexibility to store
excess energy generated during peak production times and dispatch it during periods of low generation or high
demand. This capability makes battery storage a key component in enhancing grid stability and reliability,
facilitating a higher penetration of renewable energies by mitigating their inherent variability.
Opportunities and Challenges
The limited interconnection between Japan's regions exacerbates the challenge of balancing supply and demand
across the country. Certain areas, like Kyushu in the Southwest, have experienced significant generation
curtailment—where energy that could be generated and supplied to the grid is instead turned off, primarily due to
an oversupply situation relative to demand or grid capacity constraints.
Between 2018 and 2022, system curtailment in Japan reportedly increased sixfold, underscoring the urgency of
addressing these grid management challenges. Battery storage can play a vital role in capturing curtailed energy
for later use, thus enhancing energy efficiency and grid flexibility.
Market Evolution
The conversation suggests that Japan is poised to become an emerging market for battery storage, given its need
to accommodate more renewable energy and manage grid stability. By looking at global case studies from more
mature battery storage markets, such as Great Britain and Australia, Japan can glean insights into successful
strategies and potential pitfalls in scaling up battery storage.
The Insight paper published on the Catalyst portal further delves into these opportunities and challenges, offering
a comprehensive analysis of Japan's battery storage potential. It likely includes comparisons with international
markets, showcasing how similar challenges have been addressed and what unique considerations might apply to
Japan due to its specific market conditions and geographical limitations.
Conclusion
Battery storage in Japan represents a burgeoning field with the potential to significantly contribute to the country's
energy transition goals. By providing crucial grid services, including energy arbitrage, frequency regulation, and
peak shaving, battery storage technologies can help Japan manage the variability of renewable energy sources,
reduce carbon emissions, and move towards a more sustainable and resilient energy system.
 Japanese Electricity Market Modelling for Low Carbon Future

Overview of the Japanese Electricity Market

 Regions Covered: Excludes the Okinawa region, focusing on 9 regions.
 Frequency Zones: Divided into two frequency zones: 50 Hz (Hokkaido, Tohoku, and Tokyo areas) and
60 Hz for the remaining regions.
Model Development and Assumptions
 Scenarios: Two primary scenarios are considered:
 METI Scenario: Reflects the Ministry of Economy, Trade, and Industry's net-zero target by
2050.
 Adjusted OCCTO Scenario: Based on the Organisation for Cross-regional Coordination of
Transmission Operators' less ambitious, yet optimistic, supply plans up to 2032 and projections to
2050.
 Key Inputs:
 Electricity demand is influenced by electrification, electric vehicles, heat pumps, and hydrogen
production.
 Commodity prices, including forecasted gasoline prices.
 Modelling Software: Lexus modelling software is used for capacity expansion and dispatch modelling
across the 9 regions, considering internal power flows, generation and storage deployment, and detailed
electricity demand and hydrogen production.
Capacity Expansion and Dispatch Modelling
 Capacity Expansion: Optimizes investments to achieve a net-zero scenario by 2050, considering
renewables, interconnections, and thermal generation stability.
 Dispatch Modelling: Offers a granular view at a half-hourly resolution for each region, focusing on
regional electricity prices, dispatch profiles, optimized investments, CO2 emissions, and electricity and
hydrogen trade.
Scenario Insights
 Demand Trends: A steady decrease in base load demand was observed, with an expectation of increased
demand towards 2050 due to electrification, heat pumps, electric vehicles, hydrogen production, and
carbon capture.
 METI Scenario:
 Anticipates a 50% increase in demand by 2050 compared to 2023 figures.
 Envisions an increased role for carbon capture and an expanded hydrogen economy.
 Adjusted OCCTO Scenario:
 Projects a more conservative demand increase of about 34% by 2050.
 Assumes less reliance on carbon capture and a smaller hydrogen economy.