US renewables investor Stonepeak goes big on Japanese battery storage with Singapore’s CHC

New York-based alternative investment firm Stonepeak and partner Singaporean developer CHC were awarded a 20-year contract to develop and operate battery energy storage systems (BESS) in Japan’s inaugural Long Term Decarbonisation auction last month, the companies announced Tuesday.

The JV will initially target 1GW of BESS projects in Japan over the next five years and “seek to build and grow a long-term business in Japan to facilitate Japan’s carbon neutrality goal, while supporting grid stability and reliability,” the developers said.

Japan is targeting 46% reduction in greenhouse gas emissions by 2030 towards net-zero by 2050.

Nearly half of the contracts awarded in the decarbonisation auction at the end of April went to non-Japanese firms, signaling greater opportunities for global investors in its energy transition.

“As Japan accelerates the development of renewable energy projects to meet its decarbonisation goals, energy storage will have a crucial role to play in enhancing the reliability” of its grid, said Ryan Chua, senior managing director at Stonepeak.

“This increasing need for dependable BESS capacity, which has the long-term support of the Japanese government, is the basis for our decision to pursue this partnership with CHC,” he added.

CHC is a consortium including Chinese battery maker CATL, Chinese private equity firm Cathay Fortune Company, and US investor Hartree Partners.

Jay Guo, chief executive of CHC, said: “Our partnership with Stonepeak marks a significant step towards delivering more reliable and efficient renewable energy that will benefit communities and industries across Japan.”

Stonepeak has some 16.2GW of renewables in Asia-Pacific and globally, including solar, onshore and offshore wind, and BESS.