✅ Roughly speaking
- 📉 Starting September 1, 2026, the upper limit price for primary adjustment power, etc., was reduced from 15 yen to 10 yen, and in fact the highest bid price in some areas was significantly reduced.
- 🗾 However, there are regional differences in price movements, and it is unlikely that the entire primary moderator market has "crushed" uniformly.
- ⏳ It is considered quick to judge long-term profitability based solely on short-term data immediately following a system change, especially the highest winning bid price.
- 🔋 The business viability of grid batteries must be verified not only by price, but also by the winning bid rate, winning bid quantity, participating products, SOC management, and assessment risk.
Introduction
This article will explain the price reduction implemented on September 1, 2026, which was the upper limit of primary adjustment power, and the price decline that was observed immediately afterward.
Article dated August 3, 2026 "The upper limit price in the supply-demand adjustment market will be increased from 15 yen to 10 yen. Points that battery storage operators should review now In this section, we have clarified the details of the price reduction cap that was scheduled to begin on September 1st of the same year, and the thinking behind the system.
In the previous article, we pointed out that the upper price limits for composite products, primary and secondary adjustment forces① will be reduced from 15.00 yen/ΔkW·30 minutes to 10.00 yen/ΔkW·30 minutes, and that revenue plans that rely on high-value contracts near the upper price limits will need to be reviewed.
Subsequently, as planned, a new upper price limit was applied from the actual supply and demand level on September 1st, and information has emerged suggesting that the price of primary adjustment force "collapsed," as the highest bid price fell significantly in several areas.
However, the reduction in the upper price limit is not the same as the immediate collapse of profitability in the primary adjustment force market as a whole or in individual battery storage businesses.
This paper is a follow-up to the previous article, outlining how to understand the initial price changes observed after the system changes.
The details of the price reduction limit confirmed in the previous article
Electric Power Reserve eXchange (General Incorporated Association). Hereinafter referred to as "EPRX".) announced on July 30, 2026 "On the ΔkW upper limit price in the supply-demand adjustment market" According to the report, from the actual supply and demand period on September 1, 2026, the upper limit prices for composite products, primary adjustment force and secondary adjustment force① have been reduced from 15.00 yen to 10.00 yen/ΔkW·30 min.
| Product | Until August 31, 2026 | From September 1, 2026 |
|---|---|---|
| Composite products | 15.00 yen | 10.00 yen |
| Primary adjustment force | 15.00 yen | 10.00 yen |
| Secondary adjustment force① | 15.00 yen | 10.00 yen |
| Secondary adjustment force② | 7.21 yen | 7.21 yen |
| Tertiary adjustment power① | 7.21 yen | 7.21 yen |
| Tertiary adjustment power② | No upper limit | No upper limit |
The reduction rate this time is approximately 33%.
EPRX Explanation of the upper price limit According to the report, this update is based on the results of deliberations at the 4th Working Group on Stable Electricity Supply, held on July 14, 2026.
In the previous article, we covered in detail how the upper price limit was gradually lowered from 19.51 yen to 15 yen and then to 10 yen, and the background behind the fact that batteries accounted for much of the high price adjustment near the upper price limit.
Regarding this institutional background, Previous article Please refer to.
In this follow-up report, what we want to consider is not the institutional theory of whether the reduction was appropriate, but what can be read from the price data that emerged after the reduction.
What happened after the cap price was lowered
The highest bid price fell significantly in some areas
EPRX Trading performance in the supply-demand adjustment market For each product category, target date, and time period, the offering volume, bid amount, winning bid volume, highest winning bid price, lowest winning bid price, and average winning bid price for each area are published.
Looking at trading performance before and after the system change, in some areas, the highest bid price for primary adjustment power has decreased significantly.
In particular, for areas where the previous highest bid price was over 10 yen, the impact of the price cap being lowered to 10 yen is thought to have been directly apparent.
In this respect only, the explanation that "the price fell significantly after the price cap was lowered" is in line with the facts.
It is a system that makes it natural for prices that were over 10 yen to fall below 10 yen
However, the fact that the highest bid price, which was previously over 10 yen, has now fallen to 10 yen or less under the new system does not necessarily indicate a sudden change in the market environment.
EPRX Explanation of the upper price limit According to the, the supply-demand adjustment market system itself does not determine whether the bid price exceeds the upper limit.
However, even if the contract is concluded at a price exceeding the upper limit, the payment procedure will still apply the upper limit and calculate the fee.
Therefore, if the upper price limit is lowered from 15 yen to 10 yen, the portion that previously exceeded 10 yen will be devalued, which is a result of the system's planned outcome.
It is not accurate to interpret this as a "sharp deterioration in market participants' valuations."
On the other hand, areas where the highest bid price is significantly below 10 yen cannot be explained solely by mechanical devaluation due to the upper price limit.
Changes in bid prices, the relationship between the amount offered and the amount of bid, the entry of new resources, and the results of combined contracts and wide-area procurement may be influencing the situation.
However, it is difficult to clearly isolate these factors using data only from the immediate aftermath of a system change.
Did the price of primary adjustment force really "crash"
It is not a uniform price movement across the country
In the supply-demand adjustment market, the amount of goods offered, the amount of goods accepted, the resources participating, and the usage of interconnections vary from area to area.
EPRX will publish Transaction performance by area Looking at it, the price movement after the system change is not uniform.
While prices have fallen significantly in some areas, there are also areas where changes have been small and areas where prices have risen.
Therefore, the fact that can be confirmed at this point is that the highest bid price for primary adjustment force has decreased significantly in some areas.
Describing this as a nationwide "crash" across the entire primary adjustment force market is considered somewhat too broad.
There are limitations to data immediately after a system change
Prices in the supply-demand adjustment market fluctuate depending on factors such as the volume of offerings, the amount of bids, the operating status of power supplies, grid operations, interconnection constraints, and the bidding behavior of participating businesses.
EPRX also has trading performance, Required adjustment force Ya Restrictions on transactions due to systematic work, etc We have made this public.
To analyze the reasons for price changes, it is necessary to also review this information.
Short-term data immediately following a system change may include the impact of day-of-week structure and temporary supply and demand conditions.
Therefore, it is difficult to determine whether the new price level has become established in the long term, based solely on a comparison over a limited period.
Now that the upper limit price has reached 10 yen, it is clear that we cannot expect settlement income exceeding 10 yen to be a primary adjustment factor in the future.
However, we need to look at data for a longer period to see what level the price will fall within the range of 10 yen or less.
"Supreme winning bid" is not the average revenue from battery storage
Another thing to note is that the highest bid price is used as an indicator of price decline.
EPRX Transaction performance However, the highest bid price, lowest bid price, and average bid price are each published as separate indicators.
The highest bid price is useful for understanding what deals have occurred near the market cap.
However, that price does not represent the representative unit price of all resources sold in that area.
It is not possible to determine that the average battery revenue or annual revenue declined at the same rate based solely on the decline in the highest bid price.
How to evaluate the outlook for the previous article
In our previous article, we evaluated this price cap reduction as a change that directly lowers the "earnings ceiling" for battery storage operators.
This valuation remains unchanged even now, when the 10 yen cap price was actually applied.
For business plans that assumed a price close to 15 yen would continue with primary adjustment force, a review of revenue forecasts is necessary.
On the other hand, a decrease of approximately 33% in the "ceiling" of the price cap is not the same as an immediate decrease in sales or profits for individual cases at the same rate.
The actual impact will vary depending on the previous price range and the extent to which the winning bid was made, the degree of reliance on primary adjustment, and whether revenue opportunities can be transferred to other markets.
So the current organization is as follows:
Firstly, the revenue plan, which assumes a price exceeding 10 yen, needs to be revised.
Secondly, it is considered premature to assess that the profitability of the primary adjustment force market or the battery storage business as a whole has collapsed, based solely on the highest bid price immediately following the system change.
Thirdly, the focus going forward will shift to determining the actual average winning bid price and winning bid rate within the range of 10 yen or less.
Metrics to look at to determine battery profitability
To assess the profitability of grid batteries, you should look at at least the following, not just the highest bid price:
Average price considering the winning bid
You need to check what price and quantity was actually sold, not the highest bid price.
The average unit price based on revenue, taking into account the amount of winning bids, is a more accurate indicator of the actual situation in individual businesses.
Winning bid rate and quantity
Even if you bid high, if you don't win the bid, you won't earn any money.
Even if the unit price decreases, an increase in the winning bid rate or volume may mitigate the impact on sales to some extent.
EPRX Transaction performance The amount of bids, bid amounts, bid amounts, bid amounts and bid amounts for each area are also published.
Competitive environment by area
The amount of recruitment, the amount of bids, and the composition of participating resources vary from area to area.
Instead of a uniform price assumption across the country, revenue scenarios should be set based on trading performance in the area where the case is located.
Participating products and multi-market operations
The revenue structure changes depending on which markets are combined: primary adjustment force, primary offline, secondary adjustment force, tertiary adjustment force, wholesale electricity market, capacity market, etc.
Price changes based solely on primary adjustment power cannot be equated with the overall profitability of the battery storage business.
State of Charge Management and Operational Constraints
Battery storage requires State of Charge (SOC) management to indicate the state of charge.
To maintain the ability to respond as a coordinating force, it is necessary to ensure a certain SOC, and the same capacity may not be freely available in multiple markets.
EPRX is pleased to announce its market participation in battery storage "Guidelines for entering the supply-demand adjustment market using pumped storage or battery storage facilities" We have made this public.
Assessment Non-Conformity Risk
In supply-demand adjustment markets, an assessment is conducted to determine whether the response was carried out as contracted.
EPRX "Standards for implementing disposition in the event of non-compliance with the assessment and published content" According to the law, if non-conformity occurs, penalty fees may be incurred, and corrective recommendations or suspension of transactions may be taken.
In fact, there have been published cases where the energy storage facility settings were not changed to a frequency control state and were unable to follow the instructions.
We need to consider not only the superficial winning bid price, but also the actual profits, taking into account operating costs and non-conformity risks.
What businesses and investors should do at this time
First, EPRX has published a business plan that anticipates a price exceeding 10 yen for primary adjustment power New price cap It needs to be modified accordingly.
Furthermore, it is conceivable to set multiple scenarios for price, winning bid rate, and winning bid volume by area.
As mentioned in the previous article, it is also useful to conduct a sensitivity analysis using 10 yen as the base case and a lower level as the stress case.
However, it is also necessary to avoid adopting only short-term pricing immediately following a system change as the basic case for the long term.
It is considered appropriate to update the revenue model by accumulating trading performance over the next period and checking not only the price but also the trends in offering volume, bid acceptance volume, winning bid volume, and winning bid rate.
Furthermore, regarding management outsourcing agreements and revenue sharing agreements with aggregators, it is necessary to verify whether the assumptions such as compensation design, Key Performance Indicator (KPI), and revenue guarantee are not dragging down the old upper price limit.
In explaining to financial institutions and investors, it is important to clearly state multiple scenarios by area and product, as well as their preconditions, rather than just presenting a single price indicator.
Summary
In the previous article, we covered the reduction in the upper limit price for primary adjustment power, etc. from 15 yen to 10 yen from September 1, 2026, and the institutional background behind this reduction.
This time, the new price cap has actually been applied, resulting in a significant decrease in the highest bid price in some areas.
Therefore, it remains that revenue plans that assume high price commitments near the upper limit need to be reviewed.
However, price movements vary by area, and it is likely that it is too early to assess that the entire primary adjustment force market has entered a long-term "crash phase" based solely on the highest bid price in the short period immediately following the system change.
While it is certain that the ceiling on the upper price limit has been lowered, it is still necessary to confirm what level the average price, winning bid rate, and winning bid volume will settle below that ceiling.
Battery operators, investors and financial institutions are not expected to downplay or be overly pessimistic about short-term price changes.
Taking into account the direction of institutional change outlined in the previous article, it is important to update the revenue model based on data from longer time periods and case-specific operating conditions.
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