Sumitomo, NGK Picked for Project to Cut Energy Storage Costs

NGK Insulators Ltd. (5333) and a group led by Sumitomo Electric Industries Ltd. (5802) were picked for a project aimed at reducing the cost of storage systems that can help integrate clean energy onto the grid.

Japan’s government will pay the companies as much as 75 percent of development costs, the Ministry of Economy, Trade and Industry said in a statement Aug. 29. The Sumitomo group and NGK will work separately on two different technologies.

“We expect renewable energy to expand once the price of storage batteries becomes lower and installations increase,” NGK said in a statement.

Japan is promoting energy storage amid an increasing need to improve power grids to deal with intermittent power from the sun and wind after introducing an incentive program last year. Prime Minister Shinzo Abe’s government is also pushing storage batteries for export.

The government has set a goal of cutting the cost to install systems to store excess energy from renewable sources to 23,000 yen ($234) per kilowatt hour within seven years. That’s the same as the average cost for pumped hydropower.

Participants will receive financial support for five years through March 2018, according to the ministry’s website. They’ll be asked to return part or all of the subsidies depending on their progress by March 2021.

The ministry has set aside 2.7 billion yen for the fiscal year through March 31 for the project, ministry official Takatsune Ito said in a phone interview last week.

Hokkaido Grid Congestion

A ministry report released last year said sodium-sulfur batteries, the type made by NGK, cost 40,000 yen per kilowatt hour.

The Nagoya-based company has been trying to reduce cost through automating the manufacturing process and improving product performance, spokeswoman Aki Sawafuji said on Aug. 29.

Sumitomo Electric, based in Osaka, develops batteries which use the metal vanadium to store electrical energy in electrolyte tanks.

The company can’t comment on the cost of a system using the technology because it isn’t commercialized yet, Mitsuyo Tsuruta, a spokeswoman, said by phone on Aug. 30.

Tsuruta declined to comment on the two other companies Sumitomo will work with on the project.

In July, Sumitomo was picked to supply a battery system with 60-megawatt hours of storage capacity to a substation operated by Hokkaido Electric Power Co. as part of a trade ministry program to stabilize the flow of wind and solar power in northern Japan.

To contact the reporter on this story: Chisaki Watanabe in Tokyo at cwatanabe5@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.