Enel X Japan Advocates for Enhanced Energy Flexibility with Demand Response at the World Economic Forum

Japan has both growing electricity demand and a liberalized power market, allowing for demand-side participation in the renewable energy transition. The government has forecasted a rise in electricity output of 35% to 50% by 2050 due to growing demand from semiconductor plants and data centers backing artificial intelligence (AI)¹. To manage price spikes, supply disruptions, and to allow more renewable energy sources, the Japanese market has been increasingly focused on enhancing demand flexibility.

 

Businesses are incentivized to contribute to a more stable, resilient energy infrastructure with both “availability” and “activation” payments when participating in our VPP. By joining Enel X’s VPP, companies benefit from early notifications of potential grid disruptions, allowing them to proactively adjust their operations. Additionally, earnings from DR participation provide a new revenue stream that can be reinvested in further sustainability initiatives, thus contributing to both business resilience and environmental goals.

 

Another key reason to adopt DR is that it allows for the integration of more renewable energy sources on the grid. Renewable energies are known for their intermittency and variability, with DR helping to firm the grid, it helps to keep the lights on when there’s a supply-demand imbalance.

 

Enel X Japan’s Country Manager, Hiromitsu Miyamoto, said, “Since DR’s introduction in Japan in 2016, Enel X has pioneered participation in the 1-dash program, and further balancing markets and capacity market. Enel X Japan has around 1.6 GW Demand Response capacity and approximately 200 commercial and industrial (C&I) facilities under management, which is over one-fourth of the total capacity of dispatchable power sources in the Japanese capacity market.”  

The uptake of more flexible demand opportunities in Japan is in line with a trend happening in many countries around the world. Andreoli commented, “Enel X is the world’s largest C&I VPP operator, aggregating and managing portfolios made up of every kind of C&I business. We support grids on their journey towards renewable generation thanks to the active role of more than 14,000 business sites, making up 9+GW of flexible demand, across 18 countries.”

 

When considering what Japan’s energy and industrial sectors need to advance flexibility, Miyamoto noted, “Many businesses possess inherent flexibility capabilities; they simply need the right aggregator partner to unlock this potential. Increasing awareness among energy users about the advantages of power flexibility is a major part of our mission.”

 

Based on market experience, many C&I users are still unaware of DR programs or hesitant to participate due to a lack of information. However, as the energy transition progresses, it represents a compelling business opportunity. Demand Response is one of the quickest, cheapest, and most efficient ways to strengthen the grid today, as it calls on existing resources within the community. New generation assets can be expensive and take a long time to build, whereas DR is available right now, providing secondary use of existing assets, which is a sustainable practice that aligns with circular economy principles. 

 

The World Economic Forum session underscores Enel X’s leadership in supporting Japan’s net-zero transition by unlocking the potential of flexible demand. As Japan’s energy landscape continues to evolve, Enel X is committed to facilitating a more sustainable energy choice that empowers businesses to lead the shift toward a decarbonized future.

^{1. Reuters, Japan sees need for sharp hike in power output by 2050 to meet demand from AI, chip plants, 14 May, 2024}