Sumitomo Corp, a leading Japanese trading house, has set an ambitious goal to install over 500 megawatts (MW) of battery storage in Japan by March 2031. This significant increase from the current 9 MW aims to address the challenges of renewable energy fluctuations and enhance the overall efficiency of the energy system.
Expanding Renewable Energy, Increasing Battery Demand
As Japan increases its reliance on renewable energy sources like solar and wind power to achieve decarbonization goals and strengthen energy security, the need for battery storage becomes crucial. Batteries play a vital role in smoothing out the intermittent nature of renewable energy generation, ensuring a stable and reliable power supply.
Sumitomo’s Commitment to Energy Transformation
Sumitomo’s battery storage initiative aligns with its broader commitment to advancing the energy transformation business. By developing and operating large-scale battery storage facilities, the company aims to contribute to the stabilization and decarbonization of the electricity system.
Leveraging Technology for Competitive Advantage
Shigenobu Hamada, head of Sumitomo’s energy storage business unit, emphasized the company’s focus on developing a competitive edge through proprietary operational systems. Sumitomo is also actively exploring investment opportunities in the battery storage business abroad.
Growth Projections for Battery Storage in Japan and Globally
Sumitomo anticipates substantial growth in battery storage capacity both in Japan and globally. In Japan, the local capacity aims to surge from 2 gigawatt hours (GWh) in 2023 to 40 GWh by 2030. Meanwhile, global capacity is projected to expand from 190 GWh to a staggering 2,206 GWh.
Challenges and Opportunities in the Japanese Market
While battery storage is rapidly expanding worldwide, led by China and the United States, Japan faces unique challenges due to smaller price differences in the wholesale electricity market. However, Sumitomo remains optimistic, expecting the Japanese market to take off with government support and institutional changes, such as the development of a market for adjusting electricity supply and demand.
Sumitomo’s Existing and Future Battery Storage Projects
Sumitomo has already established three energy storage facilities, including a 6 MW facility in Chitose, Hokkaido, near the planned Rapidus chip plant. The company is actively identifying suitable sites from a pool of 1,700 potential locations to further expand its battery storage network.
Addressing Output Controls and Wasted Clean Energy
In Japan, the increasing use of renewable energy has led to more frequent output controls by utilities to maintain the balance between power supply and demand. Unfortunately, this results in the wastage of potential clean energy that could otherwise be utilized. Sumitomo’s battery storage solutions aim to address this issue by storing excess renewable energy and releasing it when needed, ensuring optimal utilization and reducing wastage.