Publication date: April 2, 2025 March 2025 Monthly Newsletter: The Latest News In The Japanese Power Market
March 2025 Monthly Newsletter
Friends and Colleagues,
On March 11, it will be 14 years since the Great East Japan Earthquake. The government continues to push ahead with the restart of nuclear power plants, and this trend is expected to continue in the future. However, challenges also remain, such as rebuilding trust with local residents and addressing the issue of nuclear waste disposal. It is essential to consider how to balance electricity generation with environmental sustainability and human well-being.
In this month’s newsletter, we begin by exploring the government’s strategy to expand the introduction of offshore wind generation into the vast area of Japan’s exclusive economic zone (EEZ). We also highlight the recent announcement of Hokkaido EPCo and Mitsubishi Corporation’s joint venture specializing in renewable energy aggregation in Hokkaido. Lastly, we conclude with Tokyo Gas’s announcement about entering the BESS station operation service.
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Japan Aims to Expand Offshore Wind Into EEZ
The government has approved a cabinet decision on a draft amendment to the Act on Promoting the Utilization of Sea Areas for the Development of Marine Renewable Energy Power Generation Facilities. The amendment aims to expand offshore wind power generation into Japan’s exclusive economic zone (EEZ), which is the sixth largest in the world in terms of area, by revising the current law that allows the installation of offshore wind power in territorial waters. The Minister of Economy, Trade and Industry stated that this is an important bill as the development of floating offshore wind projects deep into its EEZs is crucial for future low carbon generation plans. The proposed amendment was scrapped in last year’s ordinary Diet session, but the aim is to enact it in this Diet session.
According to the amendment, the Minister of Economy, Trade and Industry will designate the EEZ auction area based on the results of surveys. Companies that plan to operate in the proposed project area are required to submit a draft plan that describes details such as the supply price.
After the government grants provisional permits, the council, consisting of companies that have received provisional permits and fishermen, will then make adjustments, and if the plan meets certain criteria, an official permit will be granted.
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Hokkaido EPCo and Mitsubishi Start a Renewable Energy Aggregation Business
Hokkaido EPCo and Mitsubishi Corporation have announced the establishment of Hokkaido Re-Energy Aggregation (HRA), a 50-50 joint venture specializing in renewable energy aggregation, with an initial investment of JPY100 million. The company will purchase electricity generated by wind and solar power plants in Hokkaido and sell it to electricity retailers and companies through the wholesale electricity market. In collaboration with Mitsubishi Corporation, Hokkaido EPCo considers this business as one of its diverse decarbonization solutions. The joint venture plans to begin operations in April 2025.
Hokkaido EPCo has already been involved in renewable energy aggregation projects such as retail FIT (Feed-in-Tariff) purchases and off-site PPA (Power Purchase Agreements). In addition, Hokkaido EPCo and Mitsubishi Corporation have been partnering in renewable energy-related businesses for some time. In November 2021, the two companies established Donan Hydroelectric Power Joint Venture and launched a hydroelectric project in the Donan region of Hokkaido. March 2025 Monthly Newsletter: The Latest News In The Japanese Power Market
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Tokyo Gas Enters BESS Station Operation Service
Tokyo Gas announced that it will provide a grid-scale Battery Energy Storage System (BESS) (or BESS station) operation service. As its first project, Tokyo Gas has been commissioned to provide supply and demand operation services for the Morimachi Mutsumi BESS station (75 MW output) in Morimachi, Shizuoka Prefecture, and the Tomakomai BESS station (90 MW output) in Tomakomai, Hokkaido, both developed by Renova, for a total of 165 MW.
Both BESS stations were awarded to Renova under the ‘Long-Term Decarbonization Power Source Auction’, and are scheduled to begin commercial operation in FY2028. The operation contract period is over 20 years from FY2028, and in addition to responding to the capacity market, they will be operating in a variety of ways in other markets, including the wholesale market and the balancing market. The company aims to achieve an installed capacity of 800 MW of grid-scale BESS in FY2030.
Osaka Gas also recently announced its investment in the Kami-Osatsu Energy Storage Plant, a grid-scale BESS station in Chitose City, Hokkaido, which is expected to start operation in January 2027. Interest in the development of BESS facilities in Japan is growing.
March 2025 Monthly Newsletter: The Latest News In The Japanese Power Market