Japan’s recently deregulated gas and power market is creating waves of opportunity for innovative companies, with distributed energy at its core. Power market deregulation, global energy innovation trends and a changing Japanese consumer make it ripe for innovation.
As covered in Decentralized Energy website recently the full deregulation of the energy market has prompted forward-thinking Japanese utilities to assess how they might innovate and keep or even acquire customers. The race is on – but how are companies looking at it? And what do we see as the hot topics for Japan, given its relatively unique position in the distributed energy space?
At Delta-ee, our-on-the ground research and Japanese network has found:
Monetising the opportunity “after FIT” – a phrase you hear in many Japanese companies: the withdrawal of incentive support for solar PV installations will be complete in 2019 for residential customer. There is much debate on how utilities and other companies can bring to market attractive propositions for existing and potential PV owners, that also generate revenue and customer loyalty – and help customers with a replacement revenue stream. Looking to Europe, models such as SonnenFlat, or EDP Re:dy, where PV, battery, energy supply and controls are bundled together are on particular interest. With the openness to technology, perhaps the 250,000 Japanese consumers already with PV will adopt these models quickly, as battery prices come down, even if you consider Japan’s interest in fuel cell technology and flat gas prices.
One step on from this, the debate moves to Virtual Power Plants (VPP), where the legacy of distributed energy resources and increasing numbers of PV, cogeneration and battery installations, offers the potential for decentralised demand to be aggregated, traded and managed flexibly. Japan’s markets for electricity flexibility will open fully in 2020. The potential is significant, not least as an island nation, relying on LNG, more effective and flexible use of energy has political and practical drivers.
A related, nearer term innovation, the concept of ‘Negawatts’, where consumers are paid to use less energy, has held traction in Japan for some time. Both negawatt trading and aggregation has been in place for since the early 2010s and could be combined with existing, or new, distributed renewable energy and storage assets to provide another value stream for customers. Given the acceptance of this concept in Japan, it could present companies with a great opportunity to differentiate.
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