Toshiba Energy Systems & Solutions (Toshiba ESS) has signed an agreement with Next Kraftwerke, a German virtual power plant (VPP) operator, to establish a joint venture for virtual power plant services.

Planned to be launched in November this year, the new joint venture, Next Kraftwerke Toshiba, is a VPP as a service provider that will allow third parties in Japan to set up their own VPP.

The latest step follows the signing of Memorandum of Understanding by the firms in October 2019. Toshiba ESS will have a 51% controlling stake in the JV.

Next Kraftwerke said that the new company will help others to provide balancing services using VPP technology for the owners of renewable energy assets and aggregators.

This approach is expected to help reduce imbalance risks, optimise trading, and enhance customer profits for third parties in the electricity spot market and control the reserve market.

Next Kraftwerke Toshiba will primarily focus on Japanese market

Japan plans to launch control reserve market in April 2021 to efficiently utilise more distributed energy resources, such as renewable energy and storage batteries.

In April 2022, Japan will shift from feed-in tariffs (FIT) to feed-in premiums (FIP) to make renewable energy the main power source.

As per the FIP, power generation companies will be responsible for balancing based on accurate forecasts of power generation while reducing market risks under variable market prices.

Toshiba ESS energy aggregation business, grid aggregation division vice-president and head Noriaki Kozono said: “Toshiba ESS aims to combine our know-how as a power equipment manufacturer with digital technology to become a Cyber Physical Systems (CPS) technology company in the energy industry.”

With a primary focus in Japan to support the energy industry, the co-owned joint venture will consider expansion by leveraging the two companies’ international sales channels.

The joint venture director Alexander Krautz said: “Next Kraftwerke Toshiba Corporation combines our expertise in establishing and operating a VPP for more than 10 years and Toshiba ESS’ deep knowledge of the Japanese market.

“With all the pending changes in the Japanese market, it is important for energy companies to start preparing.”

Earlier this year, Toshiba ESS announced that the Low Power IoT Solution (LPIS) delivered to Electric Power Development (J-Power) has commenced operations.