Toshiba and Next Kraftwerke are establishing a joint venture to provide virtual power plant (PP) technology to renewable energy asset owners and aggregators.

The JV combines Toshiba Energy Systems and German VPP operator Next Kraftwerke’s technologies for power generation forecasting, electricity market transactions and control of distributed energy resources.

The new company, Next Kraftwerke Toshiba Corporation, aims to provide balancing services in order to mitigate imbalance risks, optimise trading and enhance customer profits in the electricity spot market and control reserve market under feed-in premiums (FIPs), according to a statement.

Initially the focus of the company will be on the Japanese market but it will consider subsequent expansion.

The statement notes that Next Kraftwerke has the technology to manage gigawatts of distributed renewable energy resources simultaneously and has experience in energy transactions as a balance responsible party in European countries where FIP schemes have already been introduced.

Toshiba ESS has been accumulating achievements through the megawatt aggregation business and VPP demonstration projects.

“It is our firm belief that the new company is a giant step forward toward expanding our grid aggregation business,” said Noriaki Kozono, vice president and head of the energy aggregation business, grid aggregation division at Toshiba ESS.

“Toshiba ESS aims to combine our know-how as a power equipment manufacturer with digital technology to become a cyber physical systems technology company in the energy industry.”

The basis for the new JV is the opening up of Japan’s control reserve market in April 2021.

Japan is then expected to shift from a feed-in tariff to feed-in premium regime in April 2022 to make renewable energy the main power source. Under a FIP, power generation companies are responsible for balancing based on accurate power generation forecasts and are required to minimise market risks under variable market prices.