Commencing a New Initiative to Regulate the Electric Power Grid Through EVs- Public-private partnership promoting renewable energy and carbon neutrality -

Sumitomo Corporation (Head Office: Chiyoda-ku, Tokyo; Representative Director, President and Chief Executive Officer: Shingo Ueno) is driving an initiative to connect electric vehicles (hereinafter "EVs") to the power grid to contribute to the electricity supply and demand adjustment market(*1), the first such initiative in Japan(*2). Sumitomo Corporation concluded a partnership agreement with Kumamoto City, JR Kyushu and Sumitomo Corporation Kyushu in February 2024 with the aim of achieving carbon neutrality in the public and private sectors. This initiative follows the completion of the "Denki no Eki Kawajiri" joint project between JR Kyushu and Sumitomo Corporation Group started in Kumamoto City in March 2024, aiming to promote increased use of renewable energy.

The Roles and Challenges of Renewable Energy

Achieving carbon neutrality by 2050 is a key target set by the Japanese government, and this will require stabilization and modernization of the power network to facilitate a transition to renewable energy and its mass adoption. However, as power generation from renewable energy sources often depends on the weather and is therefore intermittent, the supply-demand balance must be adjusted to maintain high-quality supply. Grid-scale batteries(*3) are held to be crucial in solving this issue, leading to our development of a large-scale energy storage business.

Initiative Purpose and Details

This initiative involves using EVs not only for their primary purpose of transportation but also as batteries available to the electric power market. These vehicles will function as storage batteries to help balance the power grid's supply and demand. Specifically, EVs leased from Sumitomo Mitsui Auto Service Company and Hakobune Inc., both group companies of Sumitomo Corporation, to SHIRASAGI ELECTRIC INDUSTRY Inc. and Shirasagi Energy Co., Ltd. in Kumamoto City, will be used as storage batteries during non-operational hours in parking lots, providing regulatory power in accordance with commands sent to chargers. Related systems have been developed by Goal Connect, Inc. By entering the power supply-demand market via Kyushu, which boasts favorable sunlight conditions and high solar power market penetration compared to other areas, we aim to further promote the adoption of renewable energy(*4).

The Sumitomo Corporation Group is committed to reducing CO2 emissions and expanding the use of renewable energy across its many different businesses. Leveraging the Group's comprehensive expertise refined both domestically and internationally, our work with local business partners and governments will build a social infrastructure that coexists with regional communities. Focusing on power Grid-scale business, we will continue to promote the introduction of solar power generation facilities and expanded EV usage.

 (*1) The market for procuring the "regulatory power" necessary for frequency control and balancing electricity supply and demand over Japan’s wide geographical area.

 (*2) Based on our own research.

 (*3) Storage batteries connected to the power grid, including renewable energy power plants, transmission lines, substations and distribution facilities.

 (*4) As of the end of March 2022, the annual connection capacity of solar power in Kyushu was 10.9 GW (figures from Kyushu Electric Power Transmission and Distribution Co., Inc.).

About Sumitomo Corporation

Sumitomo Corporation (TYO: 8053) is an integrated trading company with a strong global network comprising 128 offices in 66 countries and regions. The Sumitomo Corporation Group consists of approximately 900 companies and 80,000 employees on a consolidated basis. The Group's business activities are spread across the following nine groups: Steel, Automotive, Transportation & Construction Systems, Diverse Urban Development, Media & Digital, Lifestyle Business, Mineral Resources, Chemicals Solutions and Energy Transformation Business. Sumitomo Corporation is committed to creating greater value for society under the corporate message of "Enriching lives and the world," based on Sumitomo’s business philosophy passed down for over 400 years.  Sumitomo Corporation