A must-see in the manufacturing industry! Proper use of BESS and uninterruptible power supplies (UPS) and the effects of introducing them [with subsidy information]
Countermeasures against power outages and reduction of electricity costs are important management issues in the manufacturing industry. BESS (battery energy storage systems) and uninterruptible power supplies (UPS) each have different characteristics, and it is necessary to use them properly according to the application. In this article, we will provide practical information on everything from technical differences between the two systems to implementation effects and selection methods.
What is the difference between a BESS and an uninterruptible power supply (UPS)? Guide to proper use in manufacturing
BESS and UPS have something in common: power backup, but their purpose and function are very different. For optimal selection at the manufacturing site, it is important to first understand the basic differences.
Basic differences between BESS and UPS | Clear at a glance in the comparison chart
The biggest difference between BESS and UPS lies in their primary purpose. BESS is defined as “an electric storage resource that receives and stores electrical energy from distribution grids and other electrical systems, and can later return electrical energy to the distribution grid,” and its main purpose is energy management. Meanwhile, UPS specializes in protecting critical equipment from instantaneous power outages.
BESS application scenarios in the manufacturing industry | Long time backup and monetization
BESS is positioned as a strategic investment in the manufacturing industry that goes beyond simple power outage countermeasures. BESS utilizes advanced lithium-ion battery technology and integrates it with renewable energy sources, and maintains transmission grid stability by storing energy in batteries and distributing it when needed.
Main uses of BESS in the manufacturing industry
- peak cut: 10-30% reduction in basic charges due to reduced contracted electricity
- Energy arbitrage: Store cheap electricity at night and use during peak daytime hours
- Long backup time: Can handle power outages of 4-8 hours or more
- Renewable energy integration: Improved electricity self-sufficiency ratio by combining with solar power generation
- Electricity sales business: In Japan, stable profits for 20 years are secured through the government's long-term contract system
Manufacturing sites where UPS is essential | Instantaneous shutdown measures and critical equipment protection
UPS acts as a last resort to protect critical equipment from instantaneous power cuts. Lead-acid batteries have been used for energy storage for over 150 years and are prized for their low cost robustness. Especially in the manufacturing industry, even a power outage of just a few seconds can lead to huge losses.
Manufacturing equipment where UPS is essential
- control system: Industrial control systems such as PLC, SCADA, and DCS
- Quality control equipment: Measuring instruments, inspection equipment, analysis equipment
- data server: Production Management Systems, Quality Databases
- safety system: Emergency stop devices, surveillance cameras, alarm systems
- precision processing machine: Semiconductor manufacturing equipment, precision mold processing machines
Effects of introducing BESS in the manufacturing industry | Actual data on cost reduction and utilization rate improvement
What specific effects can be obtained in the manufacturing industry by introducing BESS? We will verify quantitative effects from actual implementation cases in Japan and overseas.
Energy cost reduction effect | Achieved 10-30% reduction in electricity bills
The biggest advantage of introducing BESS in the manufacturing industry is a definite cost reduction effect. In the case of the steel manufacturing industry, manufacturing process costs have been reduced by approximately 10%, and total annual savings of more than 1 million euros have been achieved.
Specific reduction effects
- Peak cut effect: 20-30% reduction in maximum power demand
- Reducing electricity bills: 10-25% reduction in annual energy costs
- Demand fee reduction: Reduced basic charges by 15-30% per month
- Utilizing fees by time zone: Utilize 30-40% cost difference by utilizing electricity at night
Productivity improvement through power outage countermeasures | Reduced downtime and stabilized quality
Long backup time with BESS greatly improves manufacturing productivity. Full output is achieved with a response time of less than 10 seconds, an operating rate of 99.9% or higher, and losses due to unplanned outages are minimized.
Results of improving productivity
- Reduced downtime: Reduced annual downtime by over 90%
- Production cycle time: 40% reduction in actual results
- Reduced defect rate: 30% reduction due to improved power quality
- Equipment utilization rate: 95% to 99.9% improvement
Actual implementation cases｜Success stories in domestic and international manufacturing
Within Japan, Kansai Electric Power's Tanagawa Electric Power Station Project (99 mW/396 MWh) is a typical example. Additionally, TotalEnergies has deployed a total of 129 MW of BESS at multiple facilities in France, Belgium, and Germany, enabling energy optimization throughout the manufacturing site.
Characteristics of implementing companies
- automobile manufacturing: Tesla Gigafactory (130MW standalone BESS)
- chemical industry: Use in 24-hour continuous operation processes
- Food manufacturing: Stable operation of refrigeration and refrigeration equipment
- semiconductor manufacturing: Non-stop operation in clean rooms
Consideration points for introducing BESS | Complete explanation from capacity calculation to installation conditions
In order to successfully implement BESS, it is essential to consider proper capacity design and installation conditions. I will explain practical examination methods based on requirements specific to the manufacturing industry.
How to calculate required capacity｜Practical calculation examples for the manufacturing industry
BESS capacity calculation requires a different approach depending on the application. The basic battery capacity calculation formula is expressed as “battery capacity (Ah) = (load current × operating time)/(depth of discharge × efficiency)”.
Examples of capacity calculations in manufacturing
[Peak cut applications]
Required capacity = (peak demand - base load) × peak duration/system efficiency
Example: 2 MW x 4 hours peak reduction
Required capacity = (2 MW x 4 hours)/(0.8 x 0.9) = 11.1 MWh
[Power outage backup applications]
Required capacity = critical load × backup time × safety factor/ system efficiency
Example: 500 kW x 8 hour backup
Required capacity = (500 kW x 8 hours x 1.2)/0.85 = 5.6 MWh
Installation Site Requirements | Factory Installation Requirements Checklist
Choosing the right location is important for installing a BESS. A land area of 0.5-1 acres per 10 MWh will be required, and installation possibilities at existing factory facilities should be considered in advance.
Prerequisites for installation
- space requirements: Approximately 2,000-4,000 square meters per 10 MWh
- groundwork: Concrete foundation (load capacity 200 kg/m2 or more)
- access road: 6m or more wide (for carrying containers)
- electrical equipment: Proximity to high-voltage power receiving equipment (recommended within 100m)
- Safety separation: At least 3m from the building and 10m from the property boundary
- Firefighting equipment: Secure emergency vehicle access within 50 meters of the fire hydrant
Maintenance Requirements | Maintenance Plans for Long-term Stable Operation
Proper maintenance is essential in order to maintain BESS's performance over a long period of time. Lithium-ion batteries have a cycle life of 4,000-10,000 cycles or more, but proper maintenance can maximize their lifespan.
Regular maintenance items
- Monthly inspections
- Visual confirmation (abnormal sound, vibration, fever)
- Temperature/humidity monitoring
- Voltage/current value recording
- Quarterly maintenance
- BMS (Battery Management System) Calibration
- Check connection torque
- Insulation resistance measurement
- Annual maintenance
- Capacity test (discharge test)
- Battery module deterioration diagnosis
- Confirmation of cooling system performance
- Fire extinguishing equipment operation test
[Japan] 2025 Latest Subsidy Information｜BESS Implementation Support System for the Manufacturing Industry
The initial investment burden of introducing BESS has been drastically reduced due to generous support systems from the government and local governments. I will explain the latest grant information and application points for 2025.
National subsidy system | Up to 50% subsidy for equipment costs
Support systems by the Ministry of Economy, Trade and Industry and NEDO are substantial. The Green Innovation Fund has implemented support for BESS projects on a scale of 2 trillion yen, which strongly supports the introduction of BESS in the manufacturing industry.
Major subsidy programs (2025)
- Green Innovation Fund
- Target: Large-scale BESS of 10 MW or more
- Subsidy rate: up to 50% of construction costs
- Maximum: 5 billion yen per project
- Support for the introduction of solar power generation led by consumers
- Target: Solar power generation+BESS
- Subsidy rate: 1/3 of equipment cost
- Maximum: 300 million yen/case
- Energy saving investment promotion support project
- Target: Implementation at the factory/business site level
- Subsidy rate: 1/3 for small to medium enterprises, 1/4 for large enterprises
- Requirements: energy saving rate of 5% or more
Local Governments' Unique Support Systems | Additional Subsidies in Tokyo and Osaka
Local governments have also established their own support systems, and there are many cases where they can be used in combination with national subsidies. In particular, generous support can be received in regions where manufacturing is concentrated.
Support systems for major municipalities
- Tokyo
- Up to 50 million yen for a BESS of 1 MW or more
- Small and medium-sized enterprises expand the subsidy rate to 2/3
- Application period: April to June 2025
- Osaka Prefecture
- Support for the introduction of energy saving and energy generating equipment
- Subsidy rate: 1/3 (maximum 30 million yen)
- BCP measures are added (+10%)
- Aichi
- New energy equipment installation support
- Subsidy rate: 1/4 (maximum 20 million yen)
- There are preferential treatment for the manufacturing industry
Application Points and Precautions | Application Strategies to Increase Adoption Rates
Strategic application preparation is necessary in order to increase the acceptance rate of grant applications. In particular, the specificity and feasibility of the business plan are important evaluation points.
Key points for a successful application
- Advance preparation (3-6 months before application)
- Detailed data collection on energy usage
- Preliminary survey of installation site completed
- Get quotes from multiple manufacturers
- Tips for preparing an application
- Quantitative description of CO2 reduction effects
- Clarification of investment recovery plans
- Highlight regional contribution elements
- Common Reasons for Rejections
- Lack of evidence for cost effectiveness
- Lack of explanation of technical feasibility
- Inadequate maintenance plans
Future Market Trends and Technology Outlook | Latest Trends the Manufacturing Industry Should Know
The BESS market continues to grow rapidly, and technological innovation is expected to further improve performance and reduce costs. I will explain market and technology trends necessary for formulating long-term strategies for the manufacturing industry.
BESS Market Growth Forecast | Triple Expansion by 2030
The global BESS market continues to grow exponentially. In 2024, an all-time high of 205 GWh will be deployed, and 53% year-on-year growth will be recorded, and it is predicted that it will expand to the 35.6 billion dollar market at an annual rate of 26.9% by 2029.
Market growth factors
- Renewable energy expansion: 2030 36-38% Target (Japan)
- Electricity market reform: Market price linkage through the FIP system
- Decarbonization policy: 2050 carbon neutrality target
- Technological evolution: A virtuous cycle of cost reduction and performance improvement
Prospects for the Japanese market
- 2023:717.6 billion yen
- 2030:1,500 billion yen (forecast)
- 2035:2,500 billion yen (forecast)
- Average annual growth rate: 10.99%
Next Generation Battery Technology | Evolution of All-Solid-State Batteries and LFPs
BESS's performance has improved dramatically due to innovations in battery technology. 99% of the stationary storage market is now LFP (lithium iron phosphate) batteries, and safety and cost performance have been greatly improved.
Notable technology trends
- Evolution of LFP batteries
- Energy density: 200Wh/kg achieved
- Cycle life: 10,000 times or more
- Cost: 60% reduction compared to 2020
- all-solid-state battery
- 2025: Mass production is scheduled to begin
- 2028: Full-scale commercialization
- Energy density: 2-3 times higher than current
- Charging time: reduced to 1/3
- Other innovative technologies
- Sodium-ion batteries: raw material cost 1/10
- Flow battery: long life of more than 20 years
- Graphene batteries: ultra-fast charging and discharging
Impact on the manufacturing industry and response strategies | A turning point in energy strategy
The spread of BESS will fundamentally change the energy strategy of the manufacturing industry. The Japanese government plans to invest 150 trillion yen over the next 10 years, and there is an urgent need for the manufacturing industry to respond to this major turning point.
Strategies the manufacturing industry should take
- Short-term strategy (1-2 years)
- Initial introduction using subsidies
- Immediate cost reduction through peak cuts
- Minimizing risk by using it in combination with an existing UPS
- Medium-term Strategy (3-5 years)
- Integration with renewable energy
- Participation in VPP (Virtual Power Plant)
- Energy management system construction
- Long Term Strategy (5-10 years)
- Transition to a fully self-consumption system
- Realizing a carbon-neutral factory
- Considering entering the energy business
Summary | Key points of successful selection and implementation of BESS and UPS in the manufacturing industry
BESS and UPS each have different strengths, and in the manufacturing industry, understanding the characteristics of both systems and then introducing the right people in the right place is the key to success.
The introduction of BESS in the manufacturing industry is evolving from simple blackout countermeasures to strategic energy investments. By designing appropriate capacity, utilizing subsidies, and building a long-term energy strategy, it is possible to reduce costs by 10-30% and improve operating rates of 99.9% or more.
5 key points for a successful implementation:
- Clarification of applications: Setting priorities for peak cuts, power outages, and renewable energy integration
- Designing the right capacity: Economical capacity calculation that avoids oversizing and undersizing
- Making the most of subsidies: Reduce initial investment by combining national and local government systems
- Phased implementation: Start with a small implementation and expand as you confirm the effects
- Establishing a maintenance system: Maintenance plan for long-term stable operation
2025 is the perfect time to introduce BESS. With a full subsidy system, mature technology, and clear return on investment prospects, it is now possible to balance strengthening the competitiveness of the manufacturing industry and achieving carbon neutrality.
Source
https://kmecsone.jp/article/moxa-column/column_184/
https://www.energy-storage.news/japan-large-scale-battery-storage-opportunities-in-an-evolving-market/
https://www.cummins.com/jp/news/2024/08/01/what-are-battery-energy-storage-systems-bess
https://www.alvarezandmarsal.com/insights/case-study-delivering-cost-savings-across-manufacturing-process-and-purchasing-functions
https://www.edina.eu/power/battery-energy-storage-system-bess
https://pknergypower.com/difference-between-ups-and-bess/
https://www.mckinsey.com/industries/automotive-and-assembly/our-insights/enabling-renewable-energy-with-battery-energy-storage-systems
https://www.ey.com/ja_jp/insights/energy-resources/four-factors-to-guide-investment-in-battery-storage
https://www.baringa.com/en/insights/low-carbon-capital/japanese-governments-reform-to-energy-policy/
https://www.startus-insights.com/innovators-guide/solid-state-battery-news-brief/
https://www.energy-storage.news/global-bess-deployments-soared-53-in-2024/
https://www.marketsandmarkets.com/Market-Reports/battery-energy-storage-system-market-112809494.html
https://www.aplawjapan.com/en/publications/20230217
https://green-innovation.nedo.go.jp/en/about/
https://eepower.com/technical-articles/battery-sizing-explained/
https://www.energy-storage.news/japanese-government-selects-battery-aggregators-for-jpy9-billion-subsidy-scheme/
https://www.circuitenergy.ca/blog/post/8-operational-strategies-for-enhancing-lifespan-of-lithium-ion-batteries-in-large-scale-bess-systems
https://www.linkedin.com/pulse/battery-energy-storage-system-bess-site-requirements
https://www.kimley-horn.com/news-insights/perspectives/battery-energy-storage-system-requirements/
https://en.wikipedia.org/wiki/Tesla_Megapack
https://totalenergies.com/company/projects/electricity/battery-based-energy-storage
