Toshiba and Next Kraftwerke Sign Agreement to Establish Joint Venture-Provides support services for energy resource operations under FIP-
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Strategies / Measures
Toshiba Energy Systems & Solutions Corporation
KAWASAKI, JAPAN—Toshiba Energy Systems & Solutions Corporation (hereinafter “Toshiba ESS”) today announced that we have signed an agreement to establish a joint venture, “Next Kraftwerke Toshiba Corporation,” with the German virtual power plant (VPP) operator Next Kraftwerke GmbH (hereinafter “Next Kraftwerke”). Toshiba ESS and Next Kraftwerke will establish the new joint venture and start its operation by end of November 2020.
The new company aims to provide support services for the owners of renewable energy assets and aggregators for the balancing*1 using VPP technology, which helps to mitigate imbalance risk, optimize the operation of trading, and enhance customer profits in the electricity spot market and control reserve market. Both Toshiba ESS and Next Kraftwerke own technologies for power generation/demand forecasts, electricity market transactions, and controlling distributed energy resources. The new company can support the mitigation of imbalance risk by using these technology and optimal transactions in the electric power wholesale market, control reserve market and relative contracts (PPA*2) under feed-in premiums (FIP; certain premiums will be added to the reference market price) which is determined to be implemented after the end of feed-in tariffs (FIT; fixed price purchase agreements). Through the provision of our services we fully support the further spread of renewable energy.
The new company’s primary focus is in the Japanese market. In addition, the company will consider expansion by leveraging overseas commercial flows of both companies.
Next Kraftwerke has the technology to manage GWs of distributed renewable energy resources simultaneously, and has a wealth of experience in energy transactions as a balancing responsible party*3 in European countries where FIP schemes have already been introduced. Toshiba ESS has been accumulating achievements through the negawatt aggregation business, which provides energy-saving flexibility based on requests from domestic utilities where energy reduction from multiple consumers is aggregated, and VPP demonstration projects that have the characteristics of utilities and municipals.
Noriaki Kozono, Vice President and head of the energy aggregation business, grid aggregation division at Toshiba ESS, said, “It is our firm belief that the new company is a giant step forward toward expanding our grid aggregation business. 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.”
Background for establishing the new company
In April 2021, the control reserve market will be opened in Japan, and it is expected that more distributed energy resources, such as renewable energy and storage batteries, will be effectively utilized.
It has been determined that Japan will shift from FIT to FIP in April 2022 to make renewable energy the main power source. Under and following FIP, power generation companies are responsible for balancing based on accurate power generation forecasts and are required to minimize market risks under variable market prices*3.
With this in mind, Toshiba ESS and Next Kraftwerke initiated a study on VPP technology and sales tie-ups since October 2019, and decided to establish the joint venture.
*1. The service for a mechanism that allows a power generation company or electricity retailer to make adjustments in slices of 30 minutes to match (1) the power generation plan and power generation result, and (2) the demand plan and demand actual result.
*2. Power sales agreement between a power generator and a retail electric utility
*3. By the aggregation of multiple assets as a pool, balance responsible parties account for the balance between supply and demand.
Business model of new company
Outline of new company
|Name||Next Kraftwerke Toshiba Corporation|
|Address||72-34, Horikawa-cho, Saiwai-ku, Kawasaki|
|Representative||To be determined|
|Business||Provision of energy aggregation services|
|Established||November 2020 (planned)|
|Capital||180 million yen|
|Voting Ratio||Toshiba ESS 51%, Next Kraftwerke 49%|
Outline of Next Kraftwerke
|Name||Next Kraftwerke GmbH|
|CEOs/Co-Founders||Hendrik Sämisch, Jochen Schwill|
|Business||Virtual Power Plant Operator & Power Trader|
|Capital||€13.8 million (FY2018)|
|Sales||€627.7 million (FY2018)|