Regarding the Joint Development of a Battery Energy Storage Operation Optimization System

Chugoku Electric Power Co., Inc. (Headquarters: Naka-ku, Hiroshima City; Representative Director, President & CEO: Kengo Nakagawa; hereinafter "Chugoku Electric") and Asahi Kasei Corp. (Headquarters: Chiyoda-ku, Tokyo; Representative Director & President: Koshiro Kudo; hereinafter "Asahi Kasei") announced today that they have signed a memorandum of understanding regarding the joint development of a battery energy storage operation optimization system (hereinafter, "this system"). This system is designed to support operational decisions that contribute to the improvement of long-term profitability by considering not only the profitability from power market trading but also the impact on battery condition and lifespan. With Asahi Kasei, which possesses various data as a battery materials manufacturer, involved in software development, the system optimizing battery operations can be applied to a wide range of lithium-ion batteries. In recent years, the importance of battery energy storage systems, which provide adjustment capacity to the power grid, has increased further to accommodate the expanded introduction of renewable energy*1. In addition to developing solar and wind power, Chugoku Electric has been working to expand the introduction of renewable energy and secure adjustment capacity, such as by starting the construction of its first proprietary grid-scale energy storage station, "Kudamatsu Energy Storage Station"*2, in December 2025. Asahi Kasei has experience in developing and manufacturing lithium-ion batteries and their components such as separators, and has developed battery degradation diagnostic software utilizing its proprietary battery degradation diagnostic and predictive technology that even considers the degradation mechanisms of battery materials. In this initiative, over the period from FY2026 to FY2029, both companies will utilize their technologies and expertise to jointly develop new software that formulates charging/discharging plans for batteries based on Asahi Kasei's battery degradation diagnostic software. By conducting demonstration tests at the Kudamatsu Energy Storage Station and other locations, they aim to commercialize this system. This system comprehensively evaluates the impact of profits gained from power market trading and the degradation of batteries caused by repeated charging and discharging on future profitability*3. By controlling discharges to the market, it aims to maximize revenue from a long-term perspective, realizing optimal and sustainable battery operations. In this joint development, Chugoku Electric will conduct demonstration tests in an environment intended for actual implementation, based on its technologies and expertise in power supply and demand operations and market trading. Asahi Kasei will perform software development and implementation to realize an optimal operation plan tailored to Chugoku Electric's operational environment. Through this joint development, both companies will create new value in the battery energy storage domain, contribute to further widespread adoption, and thereby contribute to the realization of a carbon-neutral society. "Grid-scale batteries are the adjustment capacity necessary for the expanded introduction of renewable energy and are essential for the stable supply of power in the future. By utilizing the results of this joint development and contributing to the further widespread adoption of battery storage, we will contribute to realizing a carbon-neutral society. Furthermore, we aim to expand this business and create new revenue opportunities by improving the profitability of the grid-scale battery business and deploying aggregation businesses." "In this joint development, we will support the advancement of grid-scale battery operations from a technical standpoint, thereby contributing to operators' rational utilization of facilities and the creation of added value. With an eye toward the social implementation of batteries essential for the expanded introduction of renewable energy, we aim to create new value in the energy storage domain by maximizing the use of technologies and intangible assets we have cultivated in the development of materials such as separators." *1 Because power generation from renewable energy sources such as solar and wind fluctuates greatly due to weather conditions, expanding their introduction may cause power surpluses depending on the season and time of day, potentially affecting the stability of the power grid. As this can lead to output curtailment aimed at maintaining grid stability, further utilization of renewable energy is expected through the introduction of large-scale power storage systems like grid-scale batteries, which can temporarily charge when there is a surplus of electricity and discharge when necessary. *2 Kudamatsu Energy Storage Station (Kudamatsu City, Yamaguchi Prefecture) December 5, 2025 Chugoku Electric Press Release https://www.energia.co.jp/assets/press/2025/p20251205-2.pdf Completion Image *3 Batteries gradually deteriorate in performance through repeated charging and discharging, which impacts their operational capacity and lifespan over the long term. Therefore, by operating them while taking the progression of degradation into account, it is expected that the value of the battery can be utilized for a longer period, leading to an improvement in long-term profitability. Appendix: Overview of the Battery Operation Optimization System https://www.asahi-kasei.com/jp/news/2026/lom1h60000000ejp-att/ze260423_04.pdf