Renewable Energy Institute today released the report "Grid-Scale Battery Storage in Japan: Policy Recommendations for Scaling the Market."
Grid-scale battery energy storage systems (BESS) are expanding rapidly around the world. Driven by the large-scale deployment of variable renewable energy (VRE) and declining battery costs, BESS have become an important source of power system flexibility, valued for their ability to provide fast-response balancing services and time-shift electricity supply.
Japan is no exception. General transmission and distribution operators have received a large number of grid connection applications for battery storage projects. This reflects strong expectations regarding the profitability of grid-scale battery storage as a business opportunity. At the same time, however, battery storage remains a relatively new business model in Japan, and the sector faces various uncertainties and regulatory challenges. Prominent examples include long queues for grid connections and frequent changes to the rules governing key revenue-generating markets. Looking ahead, project developers will need to diversify revenue streams and adapt to an evolving market environment. New business models and increased market competition are also expected to emerge.
Drawing on interviews with industry stakeholders and other research, this report identifies the key challenges facing Japan’s battery storage market and presents a set of policy recommendations. While the analysis focuses primarily on grid-scale battery storage systems, it also examines renewable energy–co-located and customer-sited battery storage systems.
[Table of Contents]
Executive Summary
Introduction
Chapter 1. Current Status and Challenges of Grid-Scale BESS
Section 1. Overview of Grid-Scale BESS
Section 2. The Problem of Grid Connection Queues
Section 3. Issues Related to Market Operations and Revenue Streams
Chapter 2. Current Status and Challenges of Co-located and Customer-Sited BESS
Section 1. Current Status and Challenges of Co-located BESS
Section 2. Current Status and Challenges of Customer-Sited BESS
Chapter 3. Common Challenges and Opportunities for BESS
Section 1. Battery Costs and Economic Security
Section 2. Concerns Regarding NIMBY Issues
Section 3. Expectations for Grid-Forming Inverters
Section 4. Growing Interest in Long-Duration Energy Storage (LDES)
Chapter 4. Policy Recommendations for Expanding the Deployment of Grid-Scale BESS
Section 1. General Recommendations
Section 2. Recommendations for Addressing Grid Connection Queues
Section 3. Recommendations on Market Operations and Project Revenues
Section 4. Other Recommendations
Conclusion
References
[Related Links]
Report Unlocking the Potential of Grid-Scale Battery Storage: Current Status and Challenges (7 August 2025)
Special Contents Electricity Grids
