Eku Energy breaks ground on 120 MWh battery storage project in Japan

London-headquartered Eku Energy has initiated the construction of the Hirohara Battery Energy Storage System (BESS) in Oh-Aza Hirohara, Miyazaki City, Miyazaki Prefecture, as it seeks to grow its footprint in the promising market.

With a rated output of 30 MW and a storage capacity of 120 MWh, Hirohara BESS will be capable of providing four hours of electricity to approximately 63,000 households, about one-third of Miyazaki City’s population, according to the project proponents.

As the asset owner, Eku Energy will oversee construction and operations of Hirohara BESS, with commercial operations expected to commence in 2026.

The storage developer, which is jointly owned by Australia’s Macquarie Asset Management fund and Canada’s British Columbia Investment Management Corporation, says that Hirohara BESS is the first project of this kind that Mitsubishi UFJ Bank (MUFG) has arranged financing for.

Under a tolling deal announced earlier this year, Hirohara BESS will supply Tokyo Gas with electricity for 20 years, with the utility owning 100% of the project’s operating rights.

The groundbreaking ceremony was held on September 24 and attended by representatives from Miyazaki City, Tokyo Gas, and MUFG. Attendees gathered to pray for the safety and successful completion of the project.

“This occasion marks an important milestone for Eku Energy in Japan and shows our strong commitment to the local market,” said Kentaro Ono, Managing Director of Japan at Eku Energy. “As Hirohara BESS is just about to commence construction, we are exploring new opportunities to grow our footprint in the region with our Tokyo-based team of specialist experts to help Japan reach net zero in 2050.”

Japan’s battery energy storage market is expected to grow significantly in the coming years, with an expected increase from around 4 GW/10 GWh in 2022 to about 10 GW/27 GWh in 2030.

With curtilment rates of 30% and higher for renewable project owners and dire congestion issues in the northern and southernmost regions of Hokkaido and Kyushu, the interest in battery energy storage is rapidly growing.

Storage auctions are expected to act as a strong catalyst. The inaugural auction held in January tendered 2 GWh of standalone storage, mainly in Hokkaido and Kyushu. Auction participants were required to provide at least 10 MW systems with a minimum three-hour duration, which will be primarily used for arbitrage purposes.

A total 1.67 GW of projects won contracts, including 32 battery storage systems totalling 1.1 GW and three pumped hydro energy storage projects totalling 577 MW. 

Japan’s Ministry of Economy, Trade and Industry (METI) plans to hold more auctions this year and in the future. Overseas project developers for storage systems who attended PV Expo Tokyo 2024 in January expressed high hopes for this market segment, as reported by pv magazine.