According to the latest report, Huawei will start selling large-scale battery systems for renewable energy storage in Japan in March, as it seeks to meet the growing demand in Japan’s transition away from fossil fuels.
Moreover, Huawei will buy small battery packs from battery makers including CATL, and combine the cells into container-sized units capable of storing up to 2,000 kilowatt-hours of electricity, about 200 times more than a standard household battery, the report said. The capacity can be adjusted according to the buyer’s needs.
Furthermore, Tesla has been selling its own large-scale battery projects in Japan since last year. The entry of Chinese and American companies with clear cost advantages could pose a major threat to Japan’s domestic competitors. The two companies already offer smaller home battery systems in Japan.
As demand for renewable energy grows, battery storage is critical to ensuring a steady supply of electricity from these intermittent sources. Japan aims to have 36% to 38% of its energy generation from renewable sources by 2030, and its grid has insufficient spare capacity, making temporary storage facilities even more important.
Research firm Fuji Keizai expects Japan’s solar and wind battery storage market to grow from about 16.7 billion yen in 2020 to 45.8 billion yen in 2030.
Huawei’s Japanese arm is eyeing the promising market of Hokkaido, where there is a lot of potential for renewable energy generation but lacks excess grid capacity. James Chen, president of Huawei Japan, said the company expects to “rapidly develop solar power technology and reduce costs” in Japan.
Tesla is already building a foothold. Tesla Motors Japan installed its first Megapack mega grid-scale energy storage device in the country last April at a research facility operated by Takasago Thermal Engineering in Ibaraki Prefecture.
This summer, Tesla will launch a Megapack in Hokkaido that is directly connected to the transmission grid, operated by emerging electricity provider Global Engineering. Power company Japan Renewable Energy, recently acquired by oil wholesaler Eneos Holdings, said it is using a Tesla battery system in a demonstration project.
In November, electricity provider J-Power set up a Tesla storage system at a group facility in Hiroshima. Others joining the fray include Chinese solar panel maker JinkoSolar, which won an order from an undisclosed customer in September to build a large battery system in Japan. The company hopes to boost its profile with small batteries for home energy storage before ramping up sales of larger units.
Japan has its own large battery system producers such as NGK Insulators and Sumitomo Electric Industries, which deliver dozens of units a year to customers in and outside Japan. Power companies including TEPCO Holdings, as well as trading companies such as Sumitomo Corp and Marubeni Corp, are looking to commercialize large-scale storage systems made up of connected car batteries.
However, U.S. and Chinese companies enjoy huge cost advantages. According to the Mitsubishi Research Institute, in fiscal 2019, the cost of industrial stationary batteries made in Japan was 240,000 yen (about 13,392 yuan) per kilowatt-hour, including construction costs. Japan’s cabinet set a target in October to cut prices to about a quarter of that figure.
Tesla Japan is believed to be selling its systems at $440 per kilowatt-hour or less, and Huawei aims to be competitive at that price.
Unless Japan cultivates its own large-scale storage system makers and car battery makers, it risks falling behind in a major global trend. Yano Research Institute forecasts that global shipments of stationary batteries will roughly triple from 33,690 MWh in 2020 to 101,660 MWh in 2030.
“If foreign companies entering the Japanese market compete on cost, it will promote the expansion of the battery market,” said Izov Hasegawa of Mitsubishi Research. That is, foreign companies quickly grab market share.”