What Is EPRX — The Exchange That Operates the Balancing Market
EPRX is formally named the Electric Power Reserve Exchange, a general incorporated association. In line with the start of trading for all Balancing Market products in April 2024, it functions as the entity responsible for operating this market. While JEPX (Japan Electric Power Exchange) is widely known when it comes to electricity trading in Japan, EPRX is a separate, independent entity and a separate market.
What is traded in the Balancing Market is not electrical energy itself, but balancing capacity. The buyers are general transmission and distribution operators (TSOs such as TEPCO Power Grid and Tohoku Electric Power Network), and the sellers are generation companies and battery operators. Sellers receive compensation for "standing by ready to operate at any time, at a specified output, during specified time periods." Because batteries can change their output in milliseconds, they are a resource with a structural advantage in this market.
・JEPX (wholesale electricity market) … Trades electrical energy (kWh). The arena for arbitrage — charging when cheap and discharging when expensive.
・EPRX (Balancing Market) … Trades balancing capacity (delta-kW = standby). Compensation for standing by ready to raise or lower output.
・Capacity Market (operated by OCCTO) … Secures future supply capability (kW). Fixed capacity revenue.
A battery's business viability is determined by how these three markets are combined (stacked). For the full picture of revenue sources, see The 3 Revenue Sources of Batteries.
The 5 Products Traded on EPRX
The Balancing Market has five products: Primary Reserve, Secondary Reserve 1, Secondary Reserve 2, Tertiary Reserve 1, and Tertiary Reserve 2. The differences are determined by "how quickly it can respond" and "how long it can sustain," and the faster the response, the higher a product's suitability for batteries.
| Product | Response Time | Main Role | Battery Suitability |
|---|---|---|---|
| Primary Reserve | Within 10 sec | Instantaneous frequency fluctuation (GF) | Excellent — Most suited |
| Secondary Reserve 1 | Within 5 min | Short-cycle supply/demand fluctuation (LFC) | Excellent |
| Secondary Reserve 2 | Within 5 min | Economic load dispatch (EDC-H) | Good |
| Tertiary Reserve 1 | Within 15 min | Economic load dispatch (EDC-L) | Good |
| Tertiary Reserve 2 | Within 60 min | Responding to RE forecast errors | Fair |
Primary through Tertiary 1 can be entered simultaneously with a single bid as a "Composite product," while only Tertiary 2 is traded in an independent market. The control functions of each product (GF, LFC, EDC, GC), awarded unit prices, and the differences between Online and Offline connection are explained in detail in The 5 Balancing Market Products.
The Steps for Batteries to Participate in EPRX
For a battery to earn revenue in the Balancing Market, building the facility alone is not enough. It must become an EPRX trading member, conclude the prescribed contracts with a transmission and distribution operator, and then establish a structure for daily bidding.
1. Trading Member Registration and Generation Sales Contract
To bid in the Balancing Market, you must register as an EPRX trading member and conclude a generation sales contract with a general transmission and distribution operator to join a balancing group. Importantly, the party that concludes the generation sales contract and the trading member need not be the same entity. This enables a division of roles such as "the owner becomes the trading member while an aggregator handles operations" or "an aggregator participates in the market collectively as the trading member."
2. Confirming the Connection Method (the 10 MW Wall)
Batteries with installed capacity of 10 MW or more (extra-high voltage connection) must use Online (dedicated line) connection for Primary Reserve (per EPRX trading rules). Installing a dedicated line entails substantial cost, but it enables bidding in all slots and broadens revenue opportunities. Batteries under 10 MW can also enter via Offline (simple command system), but the trend is toward shrinking the Offline frame.
3. Selecting an Aggregator
With the shift to day-ahead trading, operators must decide every day, for each of the next day's 48 slots, whether to "sell on JEPX or stand by for the Balancing Market." This allocation optimization depends on the aggregator's operational algorithms, and the same facility can yield different annual revenue. Since how fees are taken (gross / net) also directly affects revenue, you should also review Aggregator Fees.
1. Business planning and grid interconnection (The Full Battery Storage Development Process)
2. Trading member registration / aggregator selection
3. Generation sales contract and joining a balancing group
4. Product selection and day-ahead bidding (the Composite product covering Primary through Tertiary 1, etc.)
5. Award → standby and response during actual supply and demand → settlement
How to Read Award Results and Revenue
EPRX publishes its trading results, allowing you to confirm which product, in which area, and at what price each award was made. A supply shortage for Primary Reserve (low fulfillment rate) continues nationwide, and the market environment offering a high probability of winning awards upon entry is set to continue for the time being. The latest data by area and by product is organized in Balancing Market Award Results Data.
Note that from March 13, 2026, the shift to day-ahead trading and 30-minute slots, along with a reduction in price caps, was implemented. The revenue ceiling has been lowered, but the shortage in Primary and Secondary 1 remains large, and revenue opportunities remain depending on product selection and operations.
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