Canaan’s new deal with Japan goes beyond mining, with its hydro-cooled rigs acting as smart power balancers, flexing energy use to steady the nation’s grid.

Canaan Inc., a bitcoin mining hardware manufacturer, has entered into a 4.5 megawatt (MW) sales agreement to put in place its hydro-cooled Avalon A1566HA-488T mining ASICs in Japan.

The project aims to help stabilize the country’s power grid with advanced real-time energy balancing technology built in.

The company reported it will be working with an electrical engineering solutions provider for the installation of the servers at a facility that is a part of a large Japanese utility company. It expects to see the first stages of this deployment by the end of 2025.

Using a process called controlled overclocking and underclocking, the miners can increase or decrease power consumption as needed, acting as a digital load balancer.

This allows them to respond instantly to fluctuations in electricity demand, helping to maintain grid stability.

Related: Pakistan Eyes Bitcoin Mining to Stabilize Power Grid

Each server can deliver up to 500 terahashes per second of computing power while consuming around 8,000 watts of energy. Powered by Canaan’s self-developed smart control chip, the system can dynamically adjust frequency, voltage, and hashrate through advanced feedback algorithms.

In a statement, Nangeng Zhang, chairman and CEO of Canaan, explained how this technology benefits both the grid and the environment:

“With our Avalon hydro-cooled servers equipped with a smart control chip and Bitcoin mining technology, utilities can leverage Bitcoin mining as a digital load balancer, improving both energy sustainability and grid efficiency.”

The initiative comes at a time when Japan faces increasing energy demands driven by residential consumption, artificial intelligence computing, and the expansion of high-density data centers. These factors are placing additional pressure on national power systems.

Zhang said Canaan is seeing rising interest in its grid-interactive solutions across several continents.

“As residential, AI compute, and high-density data centers place increasing pressure on national power systems, we are seeing rising 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 expect to expand such deployments with global energy and data-center partners in 2026.”

The project highlights a growing trend of bitcoin mining being used for energy balancing. In this model, mining operations can quickly adjust their power consumption to match grid supply and demand.

When there’s excess energy, miners ramp up operations. When demand surges or power is scarce, they scale back instantly. This responsiveness helps stabilize voltage and frequency without relying solely on traditional power plants or batteries.

Beyond its technical impact, the project also aligns with Japan’s broader digital-asset reforms. Lawmakers in the country are considering measures to classify digital assets as “financial products” under the Financial Instruments and Exchange Act (FIEA).

Proposed reforms include a flat 20% tax on digital asset gains, expanding bank participation in digital-asset services, and allowing regulated financial institutions to hold bitcoin directly.

The Japan contract 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 power for bitcoin mining operations. It also unveiled its latest Avalon A16 series mining machine earlier this year, featuring improved efficiency and higher computing power.