――The Sumitomo Electric Group 2030 VISION and the Mid-term Management Plan emphasize the realization of a green society.

Since its founding, the Sumitomo Electric Group has provided products and services that contribute to safe and comfortable living. In the current Mid-term Management Plan 2025, we have set forth the goal of “Creating a Green Society Through Our Connecting and Supporting Technologies.” Addressing environmental challenges such as global warming is becoming increasingly important in achieving a sustainable society. This is why we have positioned energy as one of our three key areas for medium- to long-term corporate value creation. By offering a broad range of products and services compatible with renewable energy, we are contributing to the realization of a decarbonized society.

―― The numerical targets of the Mid-term Management Plan 2025 were achieved one year ahead of schedule.

In fiscal 2024, consolidated results reached net sales of ¥4.68 trillion, operating income of ¥320.6 billion, and a pre-tax ROIC of 9.3%. These results all exceeded the targets originally set for fiscal 2025. These results reflect steady progress, particularly in the three key areas. In energy, demand expanded for power cables and substation equipment for renewable energy. In infocommunications, orders related to data centers for generative AI grew significantly. And in mobility, demand for automotive wiring harnesses remained robust. For fiscal 2025, although we expect a year-on-year decline in revenue and profit due to the impact of U.S. tariff policies under the Trump administration, we believe we can still exceed our target levels.

――Looking ahead to fiscal 2030, what path do you envision?

We aim to achieve ¥5 trillion in consolidated net sales and ROIC exceeding 10% by fiscal 2030, continuing growth centered on the three key areas. At the same time, sustainable growth requires nurturing future sources of earning. One area in which we see significant potential is the redox flow battery.

――What kind of product is the redox flow battery?

A redox flow battery is a large-capacity energy storage system that charges and discharges electricity through reduction-oxidation reactions while circulating an electrolyte. Our redox flow battery systems use non-flammable electrolytes, are highly resistant to degradation, and offer an operational life exceeding 20 years. The new model scheduled for release this fiscal year is designed for up to 30 years of operation, significantly longer than other battery technologies. In addition, the system components are made of flame-retardant materials, eliminating the risk of ignition that is seen in lithium-ion batteries. The electrolyte can be reused, and 99% of the remaining materials are recyclable, making the system highly environmentally friendly.

――Where have these batteries been installed?

They are used primarily as storage systems for renewable energy sources such as wind and solar power. Because renewable energy output depends on natural conditions and cannot be easily controlled, storing surplus electricity in batteries enables a stable supply aligned with demand. The system installed at Hokkaido Electric Power Network’s Minami-Hayakita Substation is the largest commercial installation to date and stabilizes wind power output. They have also been adopted in regions such as Kashiwazaki City in Niigata Prefecture, Minami-Kyushu City in Kagoshima, and the Oki Islands in Shimane Prefecture. Overseas, commercial operation began in California following a demonstration project that started in 2015. The high level of safety and recyclability was particularly valued in a region with strong environmental awareness.

The redox flow battery installed at Hokkaido Electric Power Network’s Minami-Hayakita Substation

――What challenges remain for wider adoption?

Because redox flow battery systems require tanks and pumps to circulate electrolytes, a certain installation footprint is unavoidable. Through downsizing efforts, systems can now be installed starting from three 20-foot containers. We aim to further reduce size to expand installation options and stimulate demand. Cost reduction is also a key challenge. We are working to lower initial costs by increasing production volume, developing more cost-effective materials, and improving system efficiency. As installations increase, establishing robust maintenance systems for inspections and repairs will also be essential.

――How are redox flow battery systems positioned within 2030 VISION?

They are a key solution for realizing “Living in Safety and Comfort on Our Green Planet.” The Sumitomo Electric Group follows the philosophy of “Goho Yoshi”(Five-Way Win), which refers to five kinds of stakeholders: employees, customers, suppliers, regional communities, and shareholders & investors. To deliver value to all stakeholders, steady business growth is essential. Alongside our current strong businesses, we must also cultivate the next pillars of growth.

Although business for the redox flow battery is still relatively small, we aim to quickly monetize this business to more than ¥10 billion in annual sales. Interest is growing in various regions in Japan as well as overseas. While high initial costs can be a hurdle, we strive to communicate the total value: safety, environmental performance, long-duration storage, and recyclability.

――I understand development was once suspended.

We began developing redox flow battery systems as early as the 1980s. Although commercialization was achieved in the 2000s, unresolved challenges led us to suspend development in 2005. However, the engineers involved voiced a strong desire to try again, and development resumed.

Around the same time, global trends such as the U.S. Green New Deal created strong momentum. Demand grew for safe, high-efficiency, large-capacity energy storage systems to support renewable energy. When I first worked on automotive wiring harnesses in the early 1990s, our global market share was only 5%. Today it stands at 25%. I believe the redox flow battery can follow a similar growth trajectory.