Japan’s battery market is booming, but grid access is not. Nearly 10,000 grid interconnection applications for battery projects were filed in FY2024, even though the vast majority are unlikely to reach construction. The resulting congestion has made grid connections increasingly tough to secure, pushing regulators to tighten the rules.

Starting this year, authorities insist on earlier proof of land control, raising deposits at the application stage, and pushing developers toward longer-duration systems. Transmission system operators (TSOs), struggling to process the volume of filings, are already extending grid review timelines; in some cases, pausing new applications altogether. The era of low-cost, speculative grid reservations is coming to an end.

Will this dampen the BESS sector’s outlook? Not at all, according to Japan NRG’s database of more than 200 battery projects. Today, most installations are clustered at high voltage (HV), typically around 2 MW / 8 MWh. But the market is already gearing up for a shift toward extra-high-voltage (EHV) facilities of 30-MW size and larger. The momentum is supported by the LTDA auction and growing investor appetite for green assets beyond solar and wind.

The challenge is balancing discipline with growth. Batteries are becoming vital to absorbing excess solar output to ease curtailments, stabilizing the grid and avoiding its imbalance penalties. Yet tighter access rules are likely to favor large, well-capitalized developers over smaller entrants. With officials also pushing to create so-called GX Hubs – clustering clean energy supply and power-hungry users – the shift in market structure looks set to accelerate.