Second-Level Response! Gotion High-Tech Successfully Enters Japan's Primary Adjustment Market

2025-08-10 | Eric

Recently, the Sakura Energy Storage Station, jointly developed by Gotion High-Tech and Japan's Edison Power, successfully passed comprehensive testing for Japan's primary adjustment market. Capable of responding to grid demands in seconds and rapidly adjusting output power to maintain system frequency stability, it has become the first Chinese energy storage manufacturer to enter this market. This marks the first application of a Chinese energy storage system in Japan's most critical power ancillary services market, providing new support for the flexible dispatch and stable operation of Japan's power system.

Since its grid connection in November 2024, the 2MW/7MWh Sakura Energy Storage Station has adopted an AC/DC single-point integrated architecture, equipped with remote digital monitoring and high-speed communication systems to ensure real-time operation and reliability. Originally participating in JEPX peak-valley electricity price arbitrage, the station has now expanded into power ancillary services and will officially begin trading in Japan's Electricity Power Response Exchange (EPRX) primary adjustment market in September this year.

Currently, profitability for energy storage stations in Japan mainly comes from three markets: first, the JEPX wholesale electricity market, which enables "price arbitrage" by charging at low prices and discharging at high prices; second, the demand adjustment market, particularly the "primary adjustment" market, which provides stable capacity service fees by offering second-level frequency response services to the grid; and third, the capacity market (OCCTO), which offers fixed compensation for providing stable backup power capacity annually, suitable for medium- to long-term revenue planning. These three markets complement each other and, when combined, can significantly improve the overall return on investment for energy storage stations.

The primary adjustment market is the fastest-responding and most stringent segment in Japan's power dispatch system, allowing only power sources with response times under 10 seconds to participate. Unlike traditional energy-based transactions, the primary adjustment market compensates for "standby capability"—energy storage systems need only provide second-level responses when required to earn stable service income. Complementing JEPX price arbitrage, this market can generate tens of millions of yen in additional annual revenue for energy storage systems while significantly enhancing the stability of project income structures.

The Sakura Energy Storage Station has demonstrated millisecond-level response capabilities and exceptional regulation precision, fully proving the critical role of high-performance energy storage systems in primary frequency regulation services. It not only expands the application scope of energy storage from "peak shaving and valley filling" to "grid stability support" but also provides a higher-value commercialization path for future energy storage projects.

In March 2023, Gotion High-Tech and Edison Power established a strategic partnership to develop energy storage stations in Japan. The Sakura Station, as the first pilot project, has also become a benchmark in the Tokyo Electric Power area. The two companies will continue to deepen their presence in the Japanese market, promoting large-scale energy storage applications in renewable energy.

Beyond the Sakura project, Gotion's Kikugawa Energy Storage Station in the Chubu Electric Power area has also passed primary frequency regulation testing, becoming Gotion's first primary adjustment market project in central Japan. This also marks the first tripartite joint development between Gotion, Hanwa Kogyo, and Edison Power. Both the Sakura and Kikugawa stations are independent energy storage facilities with JEPX arbitrage capabilities and primary adjustment service capabilities, featuring strong profitability models. These models are being replicated and expanded into regional markets such as Kansai, Kyushu, and Hokkaido.

Gotion High-Tech's successful entry into this market demonstrates the strong frequency regulation performance and system integration capabilities of its full-stack energy storage solutions. Particularly amid Japan's thermal power phase-out and rapid growth in renewable energy adoption, Gotion provides critical grid regulation support. Moving forward, Gotion will extend this successful experience to more projects, helping additional partners access Japan's high-value-added energy storage market for mutual commercial and technological benefits.

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