PXiSE Energy Solutions and Toshiba Energy Systems & Solutions have formed an alliance to develop microgrids, with an initial focus on Japan and growing to the global market.

Mitsui & Co., a Japanese company and a PXiSE investor, will also participate in the venture, the companies said Sept. 23.

PXiSE, a Sempra Energy subsidiary, makes a software-based microgrid control platform that manages interconnected distributed energy resources and loads.

“The transformation from one-way power flow to decentralized power grids worldwide presents a tremendous opportunity for companies to seamlessly integrate and manage thousands of distributed energy resources,” said Patrick Lee, PXiSE CEO.

Toshiba described the value of combining its energy system products and its expertise in operating virtual power plants with PXiSE software. As a result, the companies are able to offer a comprehensive solution for using distributed energy resources during ordinary times while having the ability to function as a microgrid when a disaster happens, according to Toshiba.

Japan relies on imports to cover about 90% of its energy needs, making the country a growing market for local distributed energy systems and microgrids. In the last decade, Japan has been installing growing numbers of distributed renewable generation and microgrids, PXiSE said.

Pointing to a report by consulting firm Guidehouse, the San Diego-based company said that the Asia-Pacific region is the largest overall market for microgrids, with remote regions and islands making up the majority of the opportunity for microgrids.

Guidehouse, formerly Navigant Research, expects the global microgrid market to grow to $40 billion by 2028, up from $8.1 billion this year. Global microgrid capacity is forecast to jump to 20,000 MW by the end of the decade from from 3,500 MW to 20 GW.

Toshiba has experience with microgrids. The company last year won a contract to install a 10-MW microgrid using solar panels ands batteries in the Maldives. Toshiba also helped develop a hybrid microgrid in Tasmania.

The agreement between Toshiba and PXiSE is the second recent alliance formed between a microgrid company and a Japanese company. Japan’s Hitachi in July bought a majority stake in ABB Power Grids, which has a division involved in microgrid development.