Electric grids are evolving… and GSEP member Kansai of Japan is at the forefront


Electric grids have traditionally followed a one-way model, whereby a power utility sells electricity to its customers. This model is currently evolving to a two-way model, whereby customers and utilities exchange energy.

As one example, some customers generate their own electricity through rooftop solar panels. When they generate more electricity than what they need, they can sell their surplus back to the utility. In Japan, the number of customers installing solar panels and selling surplus electricity rapidly increased after the introduction of feed-in tariffs.

As another example, more and more customers are driving electric vehicles. When they are plugged in to charge, the energy stored in the battery can be utilized by the utility either as a supplemental power source or as a way to offload excess power produced by renewable energy sources.


How can these sources be used to benefit society?

The resulting “distributed energy resources” can benefit society in several ways and ultimately help Japan accelerate electrification and achieve its decarbonization goal. First of all, a grid operator’s ability to purchase excess electricity will help individual customers pay back their investment, especially for those with PV panels for which the feed-in tariff purchase has expired. With extensive efforts of utilities to incorporate more and more renewables into their grid, it will also allow for further development of intermittent renewable sources such as wind and solar.

Secondly, allowing a grid operator to access storage at critical peak times will allow for further development of intermittent renewable sources on a larger scale, without the need for new, expensive power plants or storage solutions, all the while maintaining a stable grid.

In line with the Japanese national government’s decarbonization goal, GSEP member Kansai Electric Power has developed a “virtual power plant” (VPP) pilot project. A VPP is essentially a network of decentralized, medium-scale power generating units as well as flexible power consumers and batteries. The interconnected units are dispatched through the central control system but remain independent in their operation and ownership. The VPP can relieve the load on the grid by smartly distributing the power generated by the individual units during critical periods of peak load.

Virtual power plants make sense for an increasingly electrified world driven by connected consumers.


Location: Japan

Location: Japan

GSEP members: Kansai,