Sumitomo Reports on Spread and Expansion of Renewable Energy through Power Storage Business

However, the volume of power generated by renewable systems fluctuates greatly depending upon conditions in the natural environment such as the amount of sunlight and wind. This means that relying on such power generation systems by connecting them on a massive sclale could cause instability to the grid (that is, allowing electric utilities to integrate power generation, transmission and distribution). For this reason, some of the electric utilities that received applications from photovoltaic power generators for permission to connect to their systems, in much larger volumes of renewable power generation than initially envisioned, had to limit the connection capacity and conditions in order to avoid surges from renewable power suppliers and ensure the grid stability. This situation could cause a slowdown in the Japanese renewable energy market.

Against this background, our energy management business, which manages supply to meet demand through the use of large scale power storage systems, is expected to offer critical solutions for spreading and expanding renewable energy.

Social Value Creation chart (Reused EV Battery Project on Koshiki Islands)

Starting to create a business model for providing an environment in remote islands for introducing and connecting renewable energy by collaborating with local government

The fluctuation of renewable energy outputs will affect directly the balance of electric power supply and demand especially on the small-scale grid of remote islands because such islands are isolated from a buffer of the mainland grids. Therefore, introducing renewable energy has been difficult on small, remote islands.

Sumitomo Corporation started to develop a business model for providing an environment for connecting renewable energy by collaborating with the local government of one such grouping of remote islands, the Koshiki Islands in Satsumasendai, Kagoshima. In this project, we are planning to locate a new renewable system and an independent power storage system on the athletic field of the former Urauchi elementary school. The Koshiki-shima Urauchi Solar Farm will have a generation capacity of 100 kW. Meanwhile, the new Koshiki-shima Power Management Center, built from reused batteries taken from electric vehicles (EVs), will have a large-scale storage capacity of 800 kW. We plan to develop our new business model where the battery storage system contributes power supply-demand management for the grid stability.

On the most remote islands currently, electric power relys on diesel generators. The local area is therefore having to cope with the twin issues of large carbon dioxide emissions along with high fuel transportation costs. If we can replace some of these diesel power generators with renewable energy, we can greatly reduce the amount of carbon dioxide emitted on the Koshiki Islands. The realization of this model will also lead to a more stable power infrastructure for these remote islands, which often experience power outages caused by typhoons and other disasters, and this will contribute to the enhancement of disaster countermeasures for the community.

Location of Koshiki Islands, Satsumasendai, Kagoshima

Constructing highly economical power storage systems by effectively utilizing reused EV batteries

Stabilization of renewables with the power stored in reused batteries in the grid network

In this project we will take on the challenge of connecting power storage systems to the electrical grid independently. Since multiple sites of renewable energy in the region are connected to a single distribution network, more effective adjustment of the renewables' fluctuation at the site of grid network will be achievable compared to placing power storage systems at each individual renewable site. We wish to provide an infrastructure to connect as much renewable energy as possible to the islands by the effective use of the power storage system in the grid network, under technological support from Kyushu Electric Power Co., Inc.

Until now, no independent battery system in the Japanese grid network has been able to provide a stabilization service to renewable power suppliers. In order to successfully transform this project into a new business model, we need to engage in efforts to organize institutional studies to deal with new power-related businesses and to build a scheme for business transactions. By launching this project on the Koshiki Islands and developing the business of energy management using power storage, Sumitomo Corporation hopes to contribute to the spread and expansion of renewable energy as an industry pioneer.

Illustration showing how a power storage system connects to a grid

From remote islands to the Japanese mainland and beyond –Contributing to the realization of a sustainable society through the promotion of renewable energy-

As the owner of this project, Sumitomo Corporation pursues the creation of new value in the area of power and energy by bridging two key technologies, EV and renewable energy, to realize a low-carbon society. Using this project as a showcase, we also wish to contribute to the vitalization of the local economy.

Energy management centering on power storage is not only useful for small, remote islands in Japan and overseas, but is also suited to residential areas in the Japanese mainland where the issue of how to expand the installation of renewable energy is being addressed. To achieve this objective, it is important to further develop the business to make it sustainable over the long term by contributing to society and the environment while simultaneously creating a scheme for generating stable revenues.

Using this project as a stepping-stone, Sumitomo Corporation will develop a new energy management business to offer power stabilization and ancillary services using power storage. In the future, we wish to contribute to the realization of a sustainable society through the spread and expansion of renewable energy by deploying this business in various regions, including remote islands of overseas countries, emerging economy countries that are struggling with supply-demand balance adjustment issues, and in the U.S. and Europe, where the liberalization of the power sector is already advanced.