May 16, 2024

Big data and the green transformation: The future of energy in Japan

The critical expansion of renewable energy sources, the utilisation of big data and AI technology, and rising EV uptake are the three key drivers of transformation in Japan’s energy future, and retailers must be ready.

Japan is a country with low energy self-sufficiency and a heavy reliance on fossil fuels for energy supply. While the liberalisation of energy markets provides promise, the same energy market volatility experienced by many regions around the globe in an increasingly electrified world loom heavy - Japan’s 2030 decarbonisation goals necessitate uniquely rapid transformation.

Our team in Japan is excited about the prospect of change in the region, and particularly how Tally’s technology can accelerate energy transformation in Japan like no other software provider's can.  From renewables to Load Disaggregation, big data to Behavioural Demand Response, these are the drivers of change that energy retailers in Japan must prepare for now.

The critical expansion of renewable energy sources

In 2023, fossil fuels – predominantly coal and natural gas – made up almost two thirds of Japan’s electricity supply, however with 2030 goals looming, the widespread adoption of renewable energy sources like solar and wind power is gaining traction.  

For energy retailers, this trend necessitates continued adaption. Retailers must be enabled to transact the value of distributed energy resources to support - indeed capitalise on - diversified energy supply. Stimulating uptake for prosumer technology like solar and battery and motivating consumers to engage with their energy purchase using Load Disaggregation (LDA) and Behaviour Demand Response (BDR) solutions will be essential to accelerating the shift to a sustainable energy future for Japan.

The team recognises what Tally can offer the market in Japan, transferring advanced solutions that have proven impactful in regions further along in their green energy transition, such as Australia.  

"A recent deployment of Tally BDR went out to 5000+ customers in Australia and resulted in a 1.5kWh load reduction per customer over the two-hour event. Automated, AI-driven software that can manage energy usage to favour green energy consumption is the kind of game changing technology we can apply to the Japanese market to support our own green transition, and it’s certainly one that will help retailers manage wholesale price risk during that time." 

The utilisation of big data and AI technology

The advancements in big data analytics and AI technology represent a massive opportunity for energy retailers the world over and are particularly applicable to Japan. Enabling much-needed improvements in energy efficiency and the accuracy of demand forecasting, AI-driven analytics facilitates the optimisation of energy management all along the supply chain, delivering enhanced grid stability in an evolving climate.  

Energy retailers can leverage big data to offer personalised energy solutions, optimise pricing strategies and enhance customer satisfaction, ultimately resulting in a reduction in churn and cost-to-serve. This will become increasingly relevant as the complexity of energy consumption in Japan escalates.  

Tally’s in-house data team uses AI to build systems that help predict the profile of an individual customer according to their data set.  

"The team have built, trained, tested and refined a data model using live customer data, with the ability for consumers to contribute information to their profile that strengthens not only the relevance of the data they have access to, but also the model itself.  While this model has been built and tested on an Australian market, the prospect of applying the same technology to the Japanese market should be very exciting for energy retailers over here."

EV uptake and the growth of battery charge infrastructure

Although EV sales in Japan have been sluggish compared to other developed regions of the world, 2023 was a record year, and the trend is likely to continue. Bloomberg’s 2023 Electric Vehicle Outlook predicts EV sales will reach 44% of passenger vehicles sold worldwide by 2030, and 75% by 2040. As EV uptake grows in Japan, an urgent need for expanding battery charge infrastructure is paramount.  

In parallel, demand forecasting, supply management and grid stability will become increasingly important as market dynamics evolve under mass EV ownership. Energy retailers will have a golden opportunity to integrate EV charging systems, tariffs and incentives into their products, introducing new revenue streams and increasing customer engagement among their most profitable cohorts.

Essential to managing the new market dynamics is the ability for retailers to accurately identify EV owners within their customer base and extract granular consumption data, presenting information and recommendations back to the customer to motivate load shifting behaviour.  

"Tally’s EV customer management software is capable of initiating meaningful communication with target customers and rewarding behaviour changes at scale. It is arguably the industry’s most sophisticated AI-driven data model for EV customer management; now is the time for energy retailers in Japan to prepare for the changing transport landscape."

How Tally is accelerating growth in Japan (and you can too)

Tally supports energy retailers with digital transformation, leveraging our expertise and solutions from developed and rapidly advancing renewable energy markets like Australia and New Zealand. Our global reach offers proven, cutting-edge solutions tailored to a local market, and we’re excited about how our technology can help support a greener, smarter, more stable and self-reliant energy future for Japan. If you’re an energy retailer ready to embrace the energy transition, talk to Tally. We're ready for your call.

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