- Daiwa Energy & Infrastructure’s 160MWh revenue-stacking BESS project in Japan represents a significant step towards advancing energy storage innovation and sustainability.
- The 160MWh revenue-stacking BESS project by Daiwa Energy & Infrastructure in Hokkaido reinforces Japan’s commitment to a flexible, low-carbon energy future.
Daiwa Energy & Infrastructure (DEI), the investment arm of Daiwa Securities, has launched a new large-scale battery storage project in northern Japan. The battery energy storage system (BESS) will be located in Chitose, about 50 kilometres south of Sapporo. It will deliver 38MW of output and store 160MWh of energy. Construction has already begun, and DEI expects commercial operations to start in 2027.
The project will use a revenue-stacking model. It will generate income from Japan’s wholesale electricity market, balancing market, and capacity market. This approach will maximise returns while enhancing grid stability and renewable integration.
Japan’s energy storage market is growing quickly. After legislative reforms in 2022, large-scale energy storage became recognised under the country’s Electricity Business Act. Soon after, the Ministry of Trade, Economy and Industry (METI) and the Tokyo Metropolitan Government introduced subsidy schemes. These cover up to 30% and 50% of capital costs. In addition, the Long-Term Decarbonisation Auction (LTDA) now provides long-term revenue certainty for battery and pumped hydro projects.
Even so, challenges remain. Experts highlight high battery costs, limited grid capacity, and fierce competition for suitable land. Price volatility in ancillary service markets also adds risk. Nevertheless, Japan’s energy storage industry continues to attract investment thanks to strong policies and high returns from flexibility services.
DEI’s new project strengthens its expanding domestic and international portfolio. The firm previously invested in a 50MW/100MWh BESS in Hokkaido, which became operational in early 2024. It also developed a smaller 580kWh system in Kagoshima to reduce solar curtailment. Abroad, DEI has funded major projects, including a 250MW/500MWh BESS in Texas and a 130MW/520MWh system in northern Italy, both in partnership with Enfinity Global.
Furthermore, DEI recently partnered with Chinese battery manufacturer Gotion High-Tech. Together, they aim to deploy up to 1GWh of BESS equipment in Japan within the next two years. Through these projects, Daiwa Energy & Infrastructure continues strengthening its role as a global clean energy leader, driving Japan’s transition towards a more resilient and decarbonised power system.