Are batteries saturated? Their seats are under 10%
— and the market moved before the cap did

On 1 September the price cap in Japan's balancing market for ΔkW (EPRX) went from ¥15 to ¥10. The next step shown is ¥7.21. Since March, procurement volume has moved from "3σ-equivalent" to "1σ-equivalent," and an explanation is going around that it "fell to one third." In Kyushu the August clearing price fell to ¥4.9. Line those three up, and some people say batteries are already saturated.

We re-read the published data of EPRX and JEPX and the primary materials of the government councils, and counted. The answer is that the small seat has begun to fill, and the room is still wide. This page sets out only the concluding numbers. The evidence and the figures are on the 3 pages below.

How to read this series

The overview (this page) carries only the concluding numbers. The evidence is split into 3 pages, each laid out so that you can follow it through the figures. The order is 47-2 → 47-3 → 47-4, but you can start from whichever question interests you.

• 47-2 Procurement volume: how the size of the room is set, and what fell by how much. From the normal distribution through to the bilateral contracts for pumped storage and the price-cap ladder.
• 47-3 Supply: when and where batteries arrive. The 2 kinds of seat, the frame that is still half open, the gap between applications and what actually arrives, and the interconnector calendar.
• 47-4 Floor: where the price stops. Kyushu, which moved before the cap; what a battery can earn on JEPX; the shape that is high by day and cheap at night; and where 4 overseas markets landed.

The 5 numbers

1. Procurement volume did not fall to one third. What 3σ → 1σ cuts is only the width that covers day-to-day fluctuation; the cover for "the largest power plant stopping" does not shrink. Required volume is 0.55, and the procurement volume actually put to the market is 0.62. The largest product, the combined product, is 0.97 — essentially flat. Half of the reason for the fall is that the transmission and distribution operators (TSOs) locked up 266 × 10,000 kW of pumped storage outside the market. → 47-2 Procurement volume

2. Batteries have 2 kinds of seat. Their own frame (primary offline, about 500 MW) is 100% batteries. In the online seats — the combined market that procures primary through tertiary ① together, 3,800 MW in its largest frame — they compete against thermal and pumped storage on the same bids, and batteries hold 9% of the combined product and 23% of primary online. Extra-high-voltage batteries sit in the latter. → 47-3 Supply

3. The small frame has begun to fill, but is still half open. The shortfall rate (the share of procurement volume not awarded) for the batteries-only frame went from 67.9% in April–June (COLUMN 16) to 53% in August. Awarded battery volume rose about 1.8-fold in 4 months. Only Tokyo is 80% full; Kansai, Chugoku and Hokkaido are still largely open. The online seats are filled by thermal and pumped storage, but they are not partitioned by procurement volume: a cheaper bid gets in and the seat changes hands. → 47-3 Supply

4. The market moved before the cap did. In Kyushu, with the cap still at ¥15, August came in at ¥4.9. Even with the seats still half open, in the areas where bidding has thickened the price has begun to be set by bids rather than by the cap. The floor is "what the battery could earn elsewhere (on JEPX)" — ¥6–8 in the evening, and in the ¥1 range late at night. It is not one line but the shape of a day. "Thermal's ¥3" is not the floor. → 47-4 Floor

5. The vessel is still wide. Not all of the 3,527 × 10,000 kW of contract applications will arrive. On the developers' own plans it is 631 × 10,000 kW in FY2030, which does not even reach the vessel formed by primary, secondary ① and the combined product together (680 × 10,000 kW). Procurement volume is defined to "be increased once competition is confirmed," and the interconnectors will keep tying the areas together, beginning with Tohoku–Tokyo in 2027/11. → 47-3 Supply, 47-2 Procurement volume

Why now

6 months from the 14 March start of day-ahead trading falls in mid-September (the materials write "6 months and so on," as a rough guide). The indicators for deciding whether to go on to ¥7.21 are bid volume against procurement volume, the distribution of bid prices, and the price level of spare capacity. The Working Groups of 7/29 and 8/31 had no balancing-market item on the agenda, so the decision is still ahead. The numbers above are counted from the same data that will be used for it.

Placing your own battery

"Should we drop high voltage and go extra-high voltage?" was a question we were asked often this summer. Voltage is not the axis. 4 quantities set the position.

• Area. How full the seats are now (Tokyo 80%, Kansai, Chugoku and Hokkaido 20–30%).
• Connection year. Before or after 2027/11 (Tohoku → Tokyo) and 2030/6 (Kyushu and Chugoku → Kansai).
• Contract form. Whether there is fixed revenue (Long-term Decarbonization Power Source Auction (LDA), tolling agreement, capacity market).
• Products you can offer. Primary offline only, or primary online and the combined product as well.

Even for the same 2 MW high-voltage battery, one that takes an open seat in Kansai and can bid as far as the combined product sits in a different position from one that bids only into Tokyo's filling primary offline frame. Being extra-high-voltage settles none of these 4 by itself.

In closing

If the 5 numbers on this page are enough for you, you can stop here. If you want to check the evidence, go to the 3 pages above.

All of the numbers are ones we counted from published materials of EPRX, JEPX, the government councils, the Organization for Cross-regional Coordination of Transmission Operators (OCCTO) and the Electricity and Gas Market Surveillance Commission (EGC). Sources are listed at the foot of each page.