Japan Energy Fund announces investment in Equilibrium Energy, a builder of the next-generation of digital power companies
Credits: Canary Media (3)
26 March 2025 — Japan Energy Fund is pleased to announce that it has invested in Equilibrium Energy through Japan Energy Fund’s (JEF) Decarbonized Tech Fund managed by Japan Energy Capital.
Headquartered in San Francisco, CA, Equilibrium is building the operating system for the next-generation of power companies. This $28 million funding round was led by GS Energy. Existing investors DCVC and Valo Ventures also participated.
Background
As the world seeks to decarbonize and bring additional renewable generation resources online, the intermittent nature of these resources is adding volatility on the grid. This trend is further underpinned by the growth in electricity demand from data centers, electric vehicles, and other sources, as well as the increasing frequency of extreme weather events that add further stress to the grid.
Asset developers have responded with additional buildout of battery capacity to capitalize on volatile prices and new balancing/ancillary services schemes - Texas and California both saw a over 4x and 2x growth respectively in the level of commercially operational battery energy storage capacity from 2022-2024 (1). Japan is also expected to see increasing deployments of grid-storage batteries, with a forecasted 14-23GWh by 2030 (2).
As asset owners seek to maximize revenues in the participation of various grid and wholesale market schemes, the ability to refine trading strategies over time to maximize performance will be an essential differentiator amongst market participants. With the complex nature of power trading, including a wide variety of unique and evolving market participation rules as well as a risk of financial losses, it is a significantly difficult task to manage.
This is where so-called “optimizers” step in. Optimizers manage batteries and other assets on behalf of their owners, leveraging their own proprietary technology and strategies to maximize revenues. Depending on the precise arrangement between the optimizer and owner, owners can determine how much risk they are willing to take on future market revenues. In some cases, owners can largely de-risk the investment via a fixed fee payment from the optimizer under a tolling agreement, allowing the asset to become bankable and eligible for better debt financing terms and the optimizer to benefit from its performance premium.
With the increasing availability of data and advances in artificial intelligence, optimizers have new opportunities to gain advantages in developing and executing winning trading strategies.
(1) Modo Energy, “ERCOT Battery Energy Storage Buildout Report: 14 GW by 2026 ” ; CAISO “2023 Special Report on Battery Storage ”
(2) METI 系統用蓄電池の現状と課題
(3) Canary Media, “Tesla alum aims to build the power company of the future”
About Equilibrium Energy’s technology breakthroughs
Equilibrium Energy seeks to be a next-generation power company, operating at the intersection of technology and trading in the energy markets.
Equilibrium’s core advantage as an optimizer is in its software platform, which allows for rapid, data-driven development of trading strategies. Utilizing a wide array of market and asset data, the platform leverages artificial intelligence for forecasting and optimization of its trading models.
Equilibrium has contracted with battery owners as an optimizer and has signed multiple tolling agreements. In June 2024, Equilibrium was recognized as the top performing 1-hour battery operator in ERCOT (4).
With this investment round, Equilibrium will continue to grow its portfolio of assets under management via the signing of new tolling agreements from its 6GW pipeline.
Ryan Hanley, Founder and CEO of Equilibrium Energy: “Partnering with Japan Energy Fund is an exciting opportunity for Equilibrium Energy as we work to accelerate the transition to a decarbonized energy future. Japan Energy Fund's expertise in renewable energy markets, combined with its strong relationships with Japanese companies, provides us with valuable opportunities to expand our technology platform and explore collaborations in key markets. We’re looking forward to leveraging this partnership to further our mission and make a meaningful impact on the global energy transition."
Tomohito Shibata, Partner of Japan Energy Fund: “The expansion of grid-scale battery capacity is a fundamental enabler in addressing the dual challenges of increasing electricity demand and the integration of variable renewable energy sources. The convergence of optimization technologies with battery development presents significant opportunities for efficiency gains, and Equilibrium Energy’s approach—leveraging advanced, data-driven methodologies and scalable platform architecture underpinned by deep domain expertise—positions them at the forefront of this transformation. We are pleased to participate in this investment round and contribute to Equilibrium’s growth, as deploying innovative, technical solutions like theirs will be instrumental in shaping and stabilizing Japan’s evolving energy landscape.”
(4) Modo Energy, “ERCOT: What did battery energy storage revenues look like in June 2024?”
About Equilibrium Energy
Equilibrium Energy is a technology company building a next-generation clean power company. Its mission is to accelerate society’s transition to climate and energy equilibriums. Founded in 2021, Equilibrium operates at the intersection of cutting-edge AI, power systems fundamentals, modern software, novel commercial structuring, and dynamic risk management across the power value chain. Equilibrium is being built by experts with decades of experience in energy, science, and software. Equilibrium thrives on supporting its partners’ efforts to tackle climate change.
For more information, please visit www.equilibriumenergy.com.