Publication date: June 2, 2026 

BESS Integration Accelerates Across FIP Renewables and Thermal Power Plants

As the global energy crisis persists and Japan faces growing pressure to balance its carbon-neutral agenda with energy supply security, battery energy storage systems (BESS) are increasingly being deployed not only alongside renewable energy assets, but also at conventional power plant sites. Recent developments suggest that BESSs are supporting renewable integration under the Feed-in Premium (FIP) scheme while also helping thermal operators manage operational risks caused by renewable intermittency and rising power demand from data centers.

There have been an increasing number of projects transitioning from FIT to FIP over recent months, and these are often adding BESS assets to improve their economic viability. The government plans to support the transition from the Feed-in Tariff (FIT) to FIP until FIP accounts for approximately 25% of the total subsidized capacity (FIT and FIP combined), up from 3% as of Dec 2024 (METI). 

METI incentivizes FIT to FIP transition by accelerating approvals for BESS co-located renewable projects and lowering the curtailment priority of FIP (so FIT has a higher risk of curtailment), as well as increasing balancing cost subsidies, and allowing direct transactions of non-fossil certificates (NFCs) between generators and consumers without a retailer.

Regional government also promotes BESS deployment by providing subsidies. For example, the Tokyo Metropolitan Government (TMG) released the FY2026 guidelines for a support program to expand large-scale BESS facilities within the TEPCO service area, with a total budget of approximately JPY 13 billion (TMG). 

One of the challenges renewable generators face is an increase in curtailment orders across different regions. METI’s forecasts show that for FY2026, the total curtailment volume in Japan could reach a record high level of around 2,500 GWh (METI). This means deploying BESS assets alongside renewable generation sites becomes even more important.

As the demand for the FIP+BESS business model grows, new services are emerging. ENERES, partly owned by au Energy Holdings, has launched an aggregation service in April 2026 for corporate customers that operate renewable power plants (especially those transitioned to FIP) with co-located BESS (ENERES), aiming to ease some burdens on renewable energy operators. 

Alongside renewable generators, thermal power operators are also eyeing BESS assets. For example, JERA, the largest LNG importer (with a roughly 30% share) and a major thermal plant operator in Japan, has moved to deploy large-scale BESS assets at its gas-fired plant sites. JERA also announced that it has invested in a US-based battery startup TeraWatt Technology, with the aim of leveraging TeraWatt’s expertise for battery storage development in Japan (Nikkei). 

In recent years, the number of start-ups and shutdowns at gas-fired plants has increased as they compensate for fluctuations in renewable generation, reaching about 12,500 in FY2024. This was more than double the level in FY2014, increasing the risk of equipment failures (NIkkei). Operating batteries alongside these plants can help reduce this operational burden. Dependence on such thermal plants may be heavier than expected due to the growing need for a stable power supply from data center operators.

The increasing deployment of BESS alongside FIP renewables, thermal power plants, and, in the future, data center infrastructure, suggests expanding commercial opportunities in market-based aggregation, trading, and grid stability. As policy support, curtailment risks, and demand for reliable power continue to rise, integrated BESS assets are expected to become valuable partners for both renewable and conventional thermal plant operators. 

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