This summer has sent both temperatures and electricity prices soaring.

One Japanese startup, however, has found a way to use industrial cold storage to reduce our energy bills.

Today we sit down with Takehito Nishiyama, the CEO Greenphard Energy, and we talk about what it takes for startups to meaningfully compete in Japan’s energy markets, how hardware startups can avoid the scalability trap, and how to sell to large Japanese industrials.

It’s a great conversation, and I think you’ll enjoy it.

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Show Notes

  • Why making money from demand response is hard
  • How industrial cooling costs can be reduced by 40%
  • How to start a startup from within another startup
  • Developing a GTM to target Japanese industrial companies
  • A unique electricity arbitrage opportunity
  • How hardware startups can escape the scalability trap
  • How to onboard Japanese industrial clients
  • The future of Japanese energy startups
  • Is the Japanese education system really that conservative?

Links from the Founder

Transcript

Welcome to Disrupting Japan, Straight talk from Japan’s most innovative founders and VCs.

I’m Tim Romero, and thanks for joining me.

Good lord, it is hot outside!

Of course, maybe you see things differently. I have no idea where you are or even when you are listening to this episode of Disrupting Japan, but here in Tokyo in August of 2026, it is hot.

Well, today we’re going to sit down with Takehito Nishiyama, founder of Greenphard Energy, a startup that’s working to help keep us cool. Well, not so much keep us cool, but keep our food cool. You see, Greenphard works with refrigerated warehouses to significantly cut their electricity costs and to help them actually earn money from their electricity use.

Now, in this episode, we talk about demand response, or DR. Now, we don’t define it during the interview, but the idea is pretty simple. When electricity demand gets so high that it threatens to destabilize the grid, power companies will pay heavy electricity users to cut back for a while. And strategic use of demand response is a big part of Greenphard’s offering.

Takehito and I talk about how startups can escape the scalability trap that plagues so many industrial startups, how to start a startup from within another startup, and just why innovation is so slow to come to the energy sector in Japan.

But you know, Takehito tells that story much better than I can. So, let’s get right to the interview.

Interview

Tim: So, we’re sitting down with Takehito Nishiyama of Greenphard Energy, who’s helping reduce customers’ electricity bills and balance grid demand. So, thanks for sitting down with us.

Takehito: Thank you.

Tim: In the intro, I gave a really brief description of what you guys do, but I’m sure you can explain it much better than I can.

Takehito: Greenphard provides electricity solutions for mainly a refrigerator or air conditioner user. And also we provide our product for electricity producer side as well. We are IoT and physical AI provider and we are electricity trader as well. We are in a unique position.

Tim: So, if I understand it, you’re working to, on one side, increase the efficiency of HVAC, of cooling and refrigeration, and on the demand side, take advantage of demand response programs that are being offered by Japan’s energy company.

Takehito: Yeah, right. We control HVAC system, refrigerate and freeze very deeply. And we have two main value. First one is saving electricity consumption. And our second one is creating new electricity resource from electricity consumption side.

Tim: Well, I mean, it’s a really good topic right now, because it is suddenly very hot in Tokyo.

Takehito: Yeah, right. Today’s temperature is crazy level.

Tim: Yeah, it’s just like rainy season ended and it’s been 35 degrees for the last week. Yeah, right.

Takehito: And also today, summer area reached 40 degrees.

Tim: Oh my God, in Japan, that is crazy. It’s not supposed to be that hot here. So, let’s break that down. How do you create a new electricity resource from consumption?

Takehito: We can control the HVAC system very deeply and we use a timing approach. So, for example, the large-scale refrigerator will do overcooling before the demand response timing. So, during electricity type timing, we can reduce the electricity consumption of large-scale refrigerator. So, we can create a new demand response resource.

Tim: Okay, that makes a lot of sense. That seems like a very clear and intuitive way to save electricity. So, for commercial or industrial cooling, how much flexibility do they have to kind of overcool? I would imagine like some of those temperature bands must be pretty, pretty tight.

Takehito: It depends on the size of the facility. For example, in large-scale cold storage case, temperature range is larger than all in our air conditioner facility. So, we can use this wide range temperature.

Tim: So, how much demand response is there in Japan? I mean, four or five years ago, there was a lot of talk about how demand response was going to be an important part of managing the grid. Is that the case?

Takehito: Demand response needs is increasing year by year, but demand response resource provider is still small. Actually, just trading demand response is very easy. Most simple ways change a client-side operation, or for example, stop their factory operation. It’s very simple. But our operation is very different from that. In our solution, client-side doesn’t need to change their business operation.

Tim: But from the grid side, how often are demand response signals being sent?

Takehito: Currently, once or twice a year. But there’s a potential to change in near future because current global warming effect is really big.

Tim: So, only a couple of times a year is when you get to take advantage of demand response directly?

Takehito: But demand response needs is increasing year by year. So, current demand response resource price is highest price than before.

Tim: So, tell me about your customers. Who’s using the Greenphard system?

Takehito: Our main client is food factory and warehouse owners. And also, air conditioner control case, a lot of kind of client is there. Almost all building and office has the air conditioner. So almost all type of facility is our target.

Tim: Yeah. I mean, that makes sense that the cold storage chain, the food warehouses, it makes sense that they would be your initial targets because they are such heavy users of refrigeration and electricity. So, you mentioned like the two parts of your business model. So, one is the demand response. But if that signal only happens a couple of times a year, most of the savings must come from the operational parts.

Takehito: Actually, FTC saving impact is not small. For industrial users, we can reduce around 40% in maximum case.

Tim: I mean, that’s quite significant. What are you doing to reduce those costs? Because I would imagine that most of these systems, they’re designed to use as little electricity as possible. So, what are you optimizing? What are you improving to reduce the electricity costs by so much?

Takehito: We use a lot of kind of technology. So, AI and compressor frequency control technology. We control refrigerator as soft as possible. It’s like a soft control of car acceleration. So, usual refrigerator control the temperature in some temperature range. So, we use this allowance range. So, usual control case, when temperature reached upper side border, power on and reduce temperature very high speed. But in our case, when reached upper side range, we control the down speed more softly.

Tim: So, whereas by default, most of the equipment is designed to maintain a very specific temperature, you’re working with the customer to figure out what range it can fluctuate in and then minimizing the effort it takes to stay in that range.

Takehito: Yeah, right. We control the refrigerator temperature fluctuation more softly. And one more way, the more data driven way, if we plot this temperature fluctuation in a heat map, it’s very different with the season. For example, the factory makes same product all years. But after monitoring and analyze the temperature data, temperature heat map is a bit different with the season. So, we optimize this temperature distribution.

Tim: Okay, that makes sense. I want to dive deeper into the technology and the business model in just a second. But before that, I want to talk a bit about you.

Takehito: Oh, thank you.

Tim: So, you’ve got a background both in energy and startups.

So you were originally with Mitsubishi Power and you left to join Synspective, which is a big Japanese startup. And then you left Synspective to start Greenphard. So, what made you decide to leave Synspective and start your own company?

Takehito: Oh, actually, before I joined Synspective, I already started my own business. So, I shared my thought to Synspective side. So, Synspective is very open mind, so they accept.

Tim: So when you left Mitsubishi, you actually left to start your own startup. Then why join Synspective?

Takehito: Because I really interested in the space industry as well. When that time my own business is not so large scale, so I can do some business as well.

Tim: Wow. And the team at Synspective was fine with this? There was no problem?

Takehito: Yeah, they accepted my work style.

Tim: Wow. And so how long were you sort of working at Synspective and building Greenphart?

Takehito: Around 2.5 years.

Tim: Alright. And what was the trigger to finally say, okay, now we’re making a clean break?

Takehito: My own business growing year by year. So, I needed to focus on my business. So, I decided to leave Synspective.

Tim: And you’re still in very friendly terms with the team back at Synspective?

Takehito: Yeah, of course.

Tim: Oh, that’s awesome.

Takehito: Sometimes I play football with current Synspective head.

Tim: Oh, cool. Oh, that’s great. So, getting back to Greenphart, what’s been your basic go-to-market? How are you reaching customers? PR or trade shows or partnerships?

Takehito: Actually, every channel works well. Our product is so unique and needs from market is strong. So, we can sell our product and solution very easily than ordinary startups in industrial sector.

Tim: I mean, that’s great to hear. But usually the industrial sector, I mean, they’re not early adopters. You know, the industrials are usually the last companies to jump on a brand new technology or a brand new trend. So what did you do differently? Or what’s different about what you’re offering?

Takehito: Currently, energy price is so high. So almost all company have problem in energy cost. So, our main client is a big consumer of electricity.

Tim: So it’s just the desperation, the need of the customers.

Takehito: Yeah, customer needs is really strong.

Tim: Well, I mean, that makes sense in Japan because electricity prices are going up. And as you were talking before, so is the temperature.

Takehito: Yeah, fuel cost as well.

Tim: So, let’s talk a bit about the business model in general. So, what is your pricing model?

Takehito: Our pricing model is the subscription model. So, it includes the hardware cost and the service cost as well. Or sometimes we sell not only IoT and software, and also we sell refrigerator itself as well, and with subscription model.

Tim: So, you’re also selling the refrigeration hardware?

Takehito: Yeah, sometimes we sell large scale hardware as well.

Tim: So, I mean, but you don’t make large scale refrigeration.

Takehito: We don’t make the refrigeration system. We are a technology company, but we have strong financing skill as well. So, when we provide large scale facility, we build financing scheme for that scheme. And also we provide profit from DR trading. So, between client and our company, cash flow is very different from ordinary business.

Tim: Yeah, the demand response, that makes sense because you’re actively managing that side. But with only a couple of signals a year, what percentage of your revenues are coming from demand response side versus the subscription and equipment and financing side?

Takehito: It is changing year by year. But in my current plan, 50% come from electricity trading and 50% come from IoT and technology.

Tim: So, even though the signals only come a couple of times a year, they’re quite lucrative.

Takehito: Yeah, frequency of DR signal is only a few times in a year, but our price is high. And we trade not only DR resource, ordinary electricity as well. It’s a kind of arbitrage. We can realize arbitrage using electricity consumption side, which is our unique point. Almost all arbitrage business is using a large scale battery, but in our case, client side, they can use their electricity consumption.

Tim: Right. They can pre-cool, which is kind of a battery. It’s storage, you know?

Takehito: Yeah, battery storage.

Tim: So, how do you deal with scale? Because it seems to me that this system would be really dependent on each location it gets installed into. It would depend on the type of equipment being used and the layout for how the heat gets distributed and what’s being stored. So, how much customization is required for each new client?

Takehito: Yeah, for sure. Almost all industrial site has original components, original design. But our product can control almost all manufacturer’s facility with one system. So, customized part is very limited.

Tim: From my experience, from what I’ve seen, the single most common reason for failure of industrial tech of any kind tends to be people underestimate how different each facility is. Even ones that tend to be owned by the same company and built around the same time will have this different mix of equipment and operational style. Are you seeing that variation? Or is the food refrigeration business all similar enough?

Takehito: Actually, production line are very different operation is there in each factory or each site. But in cold storage, warehouse, and air conditioner facilities, control system is almost same. We can use almost all system we can use for every site. But we provide our system to large-scale production line as well. In that case, we need to customize a lot.

Tim: And so how long does it take you to onboard a new customer?

Takehito: The warehouse case is simple. So after a wiring, only one month.

Tim: So only a month?

Takehito: One month.

Tim: Okay, that’s not too bad at all. So, this seems like a global problem. What are your plans for global expansion?

Takehito: We already got a lot of offer from overseas market. But now we need to focus on domestic market because we try to build a strong organization as speedy as possible. So, from next year, we expand our business overseas market.

Tim: What are your priority markets? Where are you looking overseas?

Takehito: We didn’t decide yet. We already got offer from European market and Southeast Asia. So, both market has a high potential.

Tim: I mean, those seem very different markets. You could argue in Southeast Asia, it’s going to be hotter. But it would seem to me that this would be most valuable in places where electricity is expensive. So, places like Germany or the UK rather than Southeast Asia or even in Europe like Spain.

Takehito: So actually, European market already grows. So market size is enough. And also, electricity saving needs is high. And aggregation business needs also high. And this year’s temperature is so high.  So actually, timing and environment is nice. One problem is physical distances are not small. Instead of Southeast Asia, physical distance is very close. But market environment is not enough. So, aggregation business market is not enough. But the electricity saving needs is really high. So both has a large scale potential.

Tim: All right. So, let’s talk a bit about Japan in general. What is your opinion about the general market for energy services here in Japan? I mean, obviously, this is a sector I watch very closely. And it seems like three, four years ago, there was a lot of announcements, a lot of big commitments towards green energy and carbon capture and demand response and ancillary services. And a lot of those seem to have been deprioritized around the world. And so what is the situation in Japan? Do you feel like METI is still aggressively pushing green energy goals? Or do you feel like Japan also has seen a bit of deprioritization?

Takehito: So currently, because of Trump policy, energy market changing dynamically. But actually, current environment is good for us because energy price is so high. So, energy saving needs is increasing. And even our policy is changing, renewable energy rate is increasing. It means aggregation business needs is increasing year by year. To increase the renewable energy, we also offset the fluctuation. So, we need to provide flexibility power as well to increase renewable energy rate. So, from both parts, the need for our product is increasing.

Tim: Well, it seemed to be the two policies that METI is exploring, which would be most valuable to Greenphard’s business. One is obviously more demand response, but the other would be letting prices fluctuate intraday. So, having electricity be more expensive at sometimes and cheaper at sometimes. Is that something that you think is going to be rolled out soon? Or is that something that’s already happening for the industrial customers?

Takehito: In my opinion, the price range will become more wide range. Actually, it is a good chance to expand our business. Actually, even today, the price range is very wide range in wholesale market. Sometimes the price is really wide range.

Tim: Yeah, the spot market does vary quite a bit.

Takehito: Actually, this is a big business chance for us.

Tim: Well, listen, Takehito, before I let you go, I want to ask you what I call my magic wand question. And that is if I gave you a magic wand and I told you that you can change one thing about Japan, anything at all, the education system, the way people think about risk, the speed at which companies adopt new technologies, anything at all to make it better for startups and innovation in Japan. What would you change?

Takehito: Changing education is a very affect for startup environment. Almost all Japanese mindset is very conservative. So, it affects a lot of areas. So, many part is conservative. So, we need to change this mindset.

Tim: So how would you? I think that’s true. I mean, Japanese society in general is very conservative. But how would you change education to help fix that?

Takehito: We need to change a teacher’s career. So, there’s a number of business people try to be teacher. Maybe it is a good solution for changing Japanese education system. Actually, in current Japanese education system, almost all teachers don’t know business.

Tim: Are you talking mostly about university or high school or what level of education are you thinking?

Takehito: All level.

Tim: All levels?

Takehito: Especially high school and middle school and elementary school as well. So, till high school, almost all teachers think most important thing is to bring their students to good university. It is their main target. So, in my thought, it is not a good thing. We should think more large scale perspectives. Currently, almost all people think only university thing. We should think more large scale thing. Environment issue, global warming issue. There are so many global issues.

Tim: You know, I hear that a lot about Japanese high schools training people to be really conservative and focused. But I’ve worked with a couple of startup programs that are focused on high schools. And every time I have, I’ve encountered these really creative, excited high school students. So, the creativity is there for sure.

Takehito: Actually, almost all students have big potential. Oh, it’s so much fun to work with high school kids. But I think the point you made about teachers only teaching and the teachers being very focused is true, particularly at university level, because I’ve noticed that’s one of the biggest differences between Japanese and Western universities. Japanese university professors are professors. That’s what they do. That’s all they’ve done. That’s all they ever want to do. They like what they’re doing. American European style, there’s a lot more movement in and out. A lot of professors will leave for a few years and come back. A lot of people will be very successful in business and then start teaching later in life. And it is a lot more of different ideas being exchanged. Yeah, Japan, it does seem very, very narrow.

Takehito: Yeah, I think so too. The rebuilding of the system is a very effective way to change Japanese education system.

Tim: Do you see that changing recently? I’m not sure. In a recent years, it’s changed a bit. But still, I feel besides the startup society, almost all people’s mindset is not changing.

Takehito: I mean, I think it’s true. Like, so with universities, it has changed a bit. Professors will like advise startups and it’s okay to sit on a startup board now. But yeah, in general, not much change.

Tim: Yeah, not much. Well, small changes are still good. Okay, Takehito, thank you so much for sitting down with us.

Takehito: Thank you so much.

Outtro

And we’re back.

The fact that hardware is hard has become a cliche in startup circles, but it remains true. Quality goes up and costs come down with scale. And any mistakes you make are almost always very expensive to fix. It’s hard for startups to compete here, but some do, and do so successfully.

Greenphard, however, even though they make hardware, is not really a hardware startup. In fact, the integrated energy product that they’re offering their industrial customers is a very interesting one from a business model point of view.

Greenphard is an energy retailer that actually has a fair amount of control over how much and when their industrial customers are using energy. They don’t just monitor and predict their customers’ electricity use. They can actually adjust it in real time.

That’s a hell of an advantage in the electricity retailing business!

Greenphard can take advantage of demand response signals when they come, but they don’t have to wait for the grid operator to issue them. They can ramp their customers’ energy use up and down as needed to better match their own wholesale electricity commitments. Since Greenphard has such flexibility on both the supply and demand side, they can, you know, in effect, hedge against themselves.

Of course, being an electricity retailer in Japan has its own set of risks. Deregulation in the late 2010s resulted in hundreds of new, independent electricity retailers competing in the Japanese market. At the time, it looked like a real win for the Japanese consumers. But all that changed in the winter of 2021, when a cold wave was colder and lasted much longer than anyone expected. Energy consumption and energy prices spiked, and they stayed high. The retailers blew through their hedges and lost a lot of money. Most of the small, independent retailers were wiped out. Only the big players, with the balance sheets deep enough to absorb those losses, were left standing.

Energy is not an easy business, but it’s hard not to love what Greenphard is setting out to do. By blurring the lines between supply and demand, they’re driving meaningful innovation in energy. And as these incredibly hot summers all over the world are telling us, we are all in desperate need of energy innovation.

 

 

If you want to talk more about energy innovation or Tokyo’s sweltering summers, Takehito and I would love to talk with you. So come by disruptingjapan.com/show256 and let’s talk about it. And if you enjoy Disrupting Japan, share a link online or just tell people about it. Disrupting Japan is free forever and letting people know about it is the absolute best way you can support the podcast. But most of all, thanks for listening. And thank you for letting people interested in Japanese startups and VCs know about the show.

I’m Tim Romero, and thanks for listening to Disrupting Japan.