Stonepeak and CHC-Backed Energy Storage Platform Secures Five Major Projects in Japan’s Long-term Decarbonization Auction
The energy storage platform jointly developed by global investment firm Stonepeak and infrastructure developer CHC has achieved a significant milestone in Japan’s transition to a carbon-neutral future. The platform announced today that it has been awarded long-term government contracts for five battery energy storage system (BESS) projects under Japan’s Long-term Decarbonization Auction, securing a total of 348 megawatts (MW) in gross capacity.
These contracts are tied to a 20-year fixed-revenue capacity market framework, positioning the platform as one of the major players in the emerging Japanese energy storage landscape. The awarded projects represent the platform’s second consecutive success in this auction program, following its previous win in 2024, where it secured 131 MW across four BESS projects.
Government Support for Long-Term Storage Capacity
The contracts were awarded through a competitive auction process administered by the Organization for Cross-regional Coordination of Transmission Operators, Japan (OCCTO). Under the terms of the agreement, the awarded projects will enter into binding capacity market contracts with OCCTO, which acts as Japan’s designated body for transmission system coordination and energy infrastructure oversight.
The 20-year offtake agreements provide a stable revenue foundation for the development, construction, and operation of battery energy storage projects. These contracts are designed to incentivize private sector investment in long-duration energy storage infrastructure, which is viewed as essential for ensuring grid stability and supporting the integration of renewable energy sources such as wind and solar into the national grid.
As part of the contract execution process, the platform will continue advancing its late-stage development activities for the five awarded projects. These include obtaining permits, finalizing engineering and procurement contracts, and preparing for construction. The projects are expected to come online in phases over the next few years, delivering critical capacity to regional transmission networks across Japan.
Supporting Japan’s Energy Transition
Japan has set a national target of achieving carbon neutrality by 2050, and the government has made substantial policy and financial commitments to decarbonize its energy system. As part of this effort, Japan’s Ministry of Economy, Trade and Industry (METI) has launched various auction schemes, including the Long-term Decarbonization Auction, to incentivize clean energy technologies and infrastructure.
Energy storage—particularly grid-scale BESS—is seen as a cornerstone of Japan’s energy transition strategy. It helps smooth the intermittency of renewable energy generation, provides ancillary services to ensure frequency regulation, and supports peak shaving and load balancing for utilities. By stabilizing the grid, storage systems enable a higher penetration of renewables, making it possible to phase out fossil-fuel-based power generation over time.
The five new projects awarded to the Stonepeak-CHC platform are expected to significantly bolster Japan’s grid flexibility and reliability, particularly in regions where the share of renewable energy is increasing rapidly. These projects will help reduce curtailment of renewable energy, improve resource adequacy, and reduce the reliance on imported fossil fuels—all critical steps toward meeting Japan’s climate goals.
Strategic Partnership: Stonepeak and CHC
The energy storage platform is a joint venture between Stonepeak, a leading alternative investment firm specializing in infrastructure and real assets, and CHC, a specialist developer of clean energy projects across Asia. Together, they bring complementary expertise to the Japanese market: Stonepeak provides deep financial resources and investment discipline, while CHC offers local knowledge, technical experience, and project development capabilities.
Ryan Chua, Senior Managing Director at Stonepeak, emphasized the strategic importance of this latest auction win:
“We are delighted with the results of the latest Long-term Decarbonization Auction, which position the Platform well to continue supporting grid stability and reliability while facilitating Japan’s carbon neutrality objectives. We are grateful for the consideration of the Review Committee throughout this process.”
Chua also highlighted the importance of long-term partnerships in successfully navigating the complex regulatory and technical environment in Japan:
“We look forward to continuing to work with CHC to further the Platform’s strong position in Japan’s energy storage market.”
From CHC’s perspective, the latest round of auction awards reinforces the value of its collaborative model and strategic direction. CHC Director Ahmed Al-Awa commented:
“CHC is pleased with the Platform’s success in the latest Auction round, which highlights the value we bring to Stonepeak as a trusted partner and reinforces CHC’s commitment to the ongoing development of battery energy storage projects in Japan.”
“CHC looks forward to continuing to play a major role in the development of the Japanese BESS market and supporting Japan in meeting its energy transition goals.”
Growing Momentum for Energy Storage in Japan
Japan’s energy sector is undergoing rapid transformation. Following the 2011 Fukushima disaster, the country faced a reckoning over its energy mix, resulting in the accelerated development of renewable energy and storage infrastructure. Recent geopolitical tensions and fuel price volatility have further emphasized the importance of domestic energy resilience.
In response, the Japanese government has introduced a series of policy instruments aimed at accelerating clean energy deployment. These include feed-in tariffs, green transformation (GX) policies, and targeted capacity markets like the Long-term Decarbonization Auction. The goal is not only to reduce emissions but also to enhance energy independence and economic security.
In this context, the role of battery energy storage is increasingly prominent. Analysts estimate that Japan will need tens of gigawatts of energy storage capacity by 2030 to meet decarbonization targets while maintaining grid stability. The current pipeline of BESS projects, including those awarded to the Stonepeak-CHC platform, represents a critical early phase of this larger infrastructure buildout.
The momentum from this latest auction victory is expected to position the platform as a long-term leader in the Japanese energy storage space. With a portfolio of projects now totaling nearly 480 MW of awarded capacity under the Long-term Decarbonization Auction framework, the platform is poised to play a central role in Japan’s grid modernization efforts.
Over the coming months, both Stonepeak and CHC will continue working closely with local stakeholders, regulatory bodies, and suppliers to advance the awarded projects through final investment decisions and into construction. Upon completion, these projects will not only provide much-needed grid services but also serve as case studies for future public-private collaboration in Japan’s energy transition.
The successful participation of the Stonepeak-CHC platform in two consecutive rounds of Japan’s Long-term Decarbonization Auction illustrates the effectiveness of Japan’s policy design in attracting high-quality international and domestic investment into the clean energy sector. It also signals growing confidence in battery energy storage as a commercially viable and essential component of the future energy system.
As Japan continues to move toward a more sustainable and resilient electricity grid, platforms like this will be instrumental in delivering the infrastructure needed to support a net-zero future.
