Bitcoin mining hardware manufacturer Canaan Inc. has signed a 4.5 megawatt (MW) sales agreement to bring its water-cooled Avalon A1566HA-488T mining ASIC to Japan.
The project aims to incorporate advanced real-time energy balancing technology to help stabilize the country’s power grid.
The company reported that it plans to work with an electrical engineering solutions provider to install servers at facilities that are part of a major Japanese power company. The first phase of this rollout is expected to begin by the end of 2025.
Using a process called controlled overclocking and underclocking, miners can act as digital load balancers, increasing or decreasing power consumption as needed.
This allows them to respond instantly to fluctuations in power demand and helps maintain grid stability.
Related: Pakistan eyes Bitcoin mining to stabilize power grid
Each server can provide up to 500 terahash of computing power per second while consuming approximately 8,000 watts of energy. Equipped with a smart control chip developed in-house by Canaan, the system can dynamically adjust frequency, voltage, and hashrate through advanced feedback algorithms.
In a statement, Canaan Chairman and CEO Nangeng Zhang explained how the technology benefits both the power grid and the environment.
“Our Avalon water-cooled servers, equipped with smart control chips and Bitcoin mining technology, enable utilities to leverage Bitcoin mining as digital load balancers, improving both energy sustainability and grid efficiency.”
The initiative comes as Japan faces increasing energy demands due to residential consumption, artificial intelligence computing and the expansion of high-density data centers. These factors are putting additional pressure on the country’s electricity system.
Chan said Canaan is seeing growing interest in its grid interactive solutions across multiple continents.
“As housing, AI computing, and high-density data centers increase pressure on national power systems, we are seeing increased demand for our energy-efficient, grid-interactive solutions across Asia, North America, and Europe.” he said.
“This project builds on a similar initiative we supported in the Netherlands last year, and we plan to expand similar deployments with our global energy and data center partners in 2026.”
This project highlights the growing trend of Bitcoin mining being used for energy balancing. This model allows mining operations to quickly adjust their power consumption to match grid supply and demand.
When there is excess energy, the miner intensifies its work. When demand spikes or power becomes scarce, they are immediately scaled back. This responsiveness allows voltage and frequency stability without relying solely on traditional power plants or batteries.
Beyond its technical impact, this project is also consistent with Japan’s broader digital asset reform. The country’s lawmakers are considering measures to classify digital assets as “financial instruments” under the Financial Instruments and Exchange Act (FIEA).
Proposed reforms include a flat 20% tax on digital asset profits, greater bank participation in digital asset services, and allowing regulated financial institutions to hold Bitcoin directly.
The deal with Japan adds to Canaan’s growing list of international projects that combine Bitcoin mining with sustainable energy use.
The company recently launched a flare gas-to-energy project in Calgary, Canada, converting waste natural gas into electricity for Bitcoin mining operations. The company also announced its latest Avalon A16 series mining machines earlier this year with improved efficiency and higher computing power.