Capital and structuring coverage. Our involvement in these markets is on the investment side. Project execution is undertaken selectively and with local partners.
Japan is the clearest example in the region of storage revenue being underwritten by a capacity mechanism rather than by energy arbitrage, which makes it the useful comparison case when a client is weighing a merchant storage thesis elsewhere.
The third round of the long term decarbonisation power source auction closed with results published on 13 May 2026. For the first time the decarbonisation category was undersubscribed, with 4,261 MW awarded against a 5,000 MW target, at contracted capacity payments of 474.8 billion yen per year over 20 years on a three year market price average basis. The separately solicited gas fired category was fully subscribed at 3,038 MW, bringing the total to 7,299 MW.25 The undersubscription allowed storage to be awarded above its original cap, roughly 1,705 MW against an 800 MW target, but the battery only share of that was about 575 MW, materially below prior rounds, with pumped hydro and long duration storage taking more.25 Round three introduced a six hour minimum duration requirement, supply chain compliance conditions, and continued a mechanism returning 90 percent of profits.25
Different outlets reported the battery figure differently, with one widely circulated report giving 1.25 GW across 19 projects.26 The discrepancy comes from category definitions rather than from an error, which is exactly why the underlying auction documents matter more than the trade press summary.
The six hour duration rule is the item with the most consequence for anyone sizing a Japanese project. It changes the energy to power ratio, the land requirement and the cell procurement volume all at once.
JC-STAR is Japan's cybersecurity labelling scheme for connected devices, run by the Information-technology Promotion Agency and operating since March 2025. It grades products from one to four stars, with residential storage at the entry level and grid scale storage and large power conversion systems expected at the higher grades.27
Two mechanisms are turning it from a label into a requirement. First, evidence of a one star rating on battery control equipment was already a bid condition in the third round of the long term decarbonisation auction.28 Second, and wider in effect, planned grid code revisions require JC-STAR one star compliant control equipment for new grid connections. Solar and storage connecting at extra high and high voltage fall under the requirement for connection applications filed from April 2027, and low voltage facilities below 50 kW from October 2027. The trigger is the connection contract application date rather than the interconnection date, and merchant assets are not exempt.29 Equipment in scope is control gear with internet protocol communications, meaning power conversion systems, energy management systems, remote monitoring units and aggregation controllers.29
As of the first half of 2026, certification had been secured mainly at the one star level, with German, Spanish, Korean and Taiwanese manufacturers moving early on industrial and grid scale converters. Several Chinese suppliers with large positions in the Japanese market had limited own brand JC-STAR coverage, which has become a live economic security and market access dispute.27 For a manufacturer that means JC-STAR should be written into the procurement specification now rather than retrofitted after each programme publishes its final rules. For an asset owner it is a supply chain question with a fixed 2027 deadline attached.
Singapore is where the capital side of our regional work is normally anchored. Fund structuring, investor engagement and cross border vehicle design sit here. We do not present ourselves as a Singapore project developer.