Tess (TYO:5074) has agreed to cancel a 4 billion yen engineering, procurement, and construction (EPC) contract for a Kumamoto power storage plant, after the customer deemed it commercially unviable.

The cancellation followed a technical review that showed grid connection costs and timelines would far exceed initial expectations, according to a Tokyo bourse filing on Friday.

The mutual decision to cancel the project, which was originally mooted in April 2025, was due to external grid issues and the DEI Battery Fund Alpha's business decision, not TESS Engineering's performance.

The cancellation's impact has already been reflected in the company's consolidated forecast for the fiscal year ending June 2027.