EXECUTIVE SUMMARY
Japanese battery manufacturer PowerX and Kansai Transmission and Distribution have signed a basic agreement to study a 2 MW/8 MWh BESS demonstration in northern Osaka. Scheduled to begin in FY 2027, the initiative will assess battery charging and discharging as a means of relieving grid congestion, accelerating connections and potentially deferring transmission and distribution infrastructure upgrades.
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Japanese battery energy storage manufacturer PowerX, Inc. and Kansai Transmission and Distribution, Inc. (Kansai TD) signed a basic agreement on 30 October 2026 to study a new grid connection and infrastructure development approach using battery energy storage systems (BESS). The proposed demonstration will examine whether battery charging and discharging can relieve grid congestion, enable earlier electricity connections and reduce the need for transmission and distribution infrastructure reinforcement.
The initiative responds to growing grid connection demand from data centres, renewable energy facilities and other electricity users. Where existing grid capacity is insufficient, conventional infrastructure reinforcement can delay new connections. PowerX and Kansai TD will investigate whether BESS operated under predetermined utility conditions can provide an alternative to some network upgrades.
Under the planned demonstration, PowerX will install and operate a grid-scale BESS with an assumed output of approximately 2,000 kW and storage capacity of 8,000 kWh. The system is expected to be located within a Kansai TD substation in northern Osaka, with operations scheduled to begin in FY 2027. The installation site, equipment specifications, demonstration duration and other details remain subject to further study.
The proposed approach involves charging or discharging batteries when electricity flows are expected to approach network capacity limits. For example, where existing electricity demand reaches a grid capacity of 100 units, an additional 20 units would normally require reinforcement. Discharging 20 units from the BESS could maintain grid flows at 100 units, potentially avoiding or deferring infrastructure upgrades.
According to the companies, reinforcing transformers at distribution substations generally costs between JPY 100 million and several hundred million per unit. Such work typically requires two to three years or more from design to completion. Battery-based congestion management could therefore support earlier connections while improving infrastructure investment efficiency.
The studies will cover charging and discharging conditions, operating methods, contractual arrangements, equipment requirements, control and communication systems, and reliability assessment. The companies will also determine implementation responsibilities, evaluation procedures and demonstration schedules.
PowerX intends to verify whether its BESS can meet predetermined grid utility requirements while participating in electricity markets during other periods. As a battery manufacturer that also manages system operations and market controls, PowerX will evaluate performance across both hardware and operational functions.
The companies will use the demonstration to assess whether BESS can serve as an alternative to conventional grid reinforcement. PowerX also aims to apply the findings to similar arrangements with transmission and distribution utilities in other Japanese electricity service areas.