Softbank's Son battling to overhaul Japan's electric industry landscape
GOBI DESERT, Mongolia--A dry wind howls through a highland stretching as far as the eye can see in the lonely desert here in southern Mongolia.
Harnessing this eternal wind to generate electricity, and transmitting it some 3,000 kilometers to Tokyo via cross-border grids in Asia, is the grandiose project known as the "Asia Super Grid."
It's the brainchild of Masayoshi Son, president of Softbank Corp., a Japanese telecommunications giant, who started championing renewable energy sources following the accident at the Fukushima No. 1 nuclear power plant.
Son also envisages sending electricity generated by different energy sources such as solar power in Mongolia and hydropower in Russia, on this vast super grid.
Son, 56, is the third richest Japanese, with personal assets estimated at $9.1 billion (910 billion yen), according to the 2013 ranking of the world's wealthiest people by U.S. business magazine Forbes.
His Softbank Group has grown into one of the largest business entities in Japan, with 3.4 trillion yen in sales in fiscal 2012, about 30 years after he founded Softbank.
Softbank’s reach has also extended beyond Japan. It acquired Sprint Nextel Corp., the No. 3 U.S. wireless carrier, in a high-profile takeover this summer.
Son laid out his vision for supplying Japan with power using renewable sources via high-voltage grids through Asia after the crisis erupted at the Fukushima No. 1 nuclear plant, the worst nuclear disaster in the nation's history, triggered by the Great East Japan Earthquake and tsunami on March 11, 2011.
He established a joint venture between Softbank and Newcom Group, a Mongolian investment firm, last year in a bid to translate his green-energy concept into reality.
The venture, Clean Energy Asia LLC, is conducting research on the wind and the amount of sunlight in the Gobi to prepare for electricity generation.
The company has acquired a permit to lease 220,000 hectares of land in the desert, an area exceeding that of the Tokyo metropolitan area, from the Mongolian government.
With a population of only 2.8 million, Mongolia has a land area of 1.56 million square kilometers, about four times that of Japan.
Purevdagva Nayanbuu, project manager at Clean Energy Asia, said wind power in the desert holds the potential to generate electricity equivalent to that produced by seven to 10 nuclear reactors.
“Our calculations show that it will be possible to produce 10 gigawatts,” he said. “Even if we exclude windless places, we will be able to produce 7 gigawatts.”
With little rain in the desert, he added, solar power also holds much possibility. Son put costs for wind power generation in Mongolia at 2-3 yen per kilowatt-hour.
“Even if we include costs to transmit it to Japan, we can produce electricity at a cost less than nuclear power (which is estimated at slightly less than 10 yen per kilowatt-hour),” he said.
The biggest of many hurdles, Son said, is the installation of a network of transmission lines across neighboring countries.
“Europe has a cross-border network of grids,” he said. “Why won’t Asia build one?”
The project envisions transmitting power to northern Kyushu via cables laid on the seabed after power generated in Mongolia passes through grids in China and South Korea.
To become a reality, Japan needs to build a cooperative relationship with China and South Korea. To lay the groundwork, Son has wasted no time in lobbying the leaders of both countries.
In May 2012, he visited South Korea to seek cooperation from President Lee Myung-bak for the project, explaining the estimated costs for wind power generation in Mongolia.
Two months before his meeting with Lee, Satoshi Shima, 55, Son’s close aide who runs the president’s office at Softbank, sat in on a meeting between former Prime Minister Yukio Hatoyama and Xi Jinping, the Chinese vice president slated to succeed Hu Jintao as China’s top leader. Shima, a former Lower House member of the Democratic Party of Japan, was on good terms with Hatoyama, who previously headed the DPJ.
Hatoyama suggested at the meeting that Japan and China work together in the field of renewable energy.
Another formidable obstacle Son will have to overcome is the virtual stranglehold that Japan's electricity industry holds.
Electricity brought in from overseas cannot be transmitted freely because regional electric utilities monopolize transmission lines in their jurisdictions.
To change the status quo, Son once mulled acquiring a regional utility, according to people close to him.
But that would entail the decommissioning of nuclear reactors that the potential takeover target owns. Son is staunchly opposed to nuclear energy.
The process would make it impossible for the utility to stay in business due to the huge losses involved in shutting down reactors before the end of their lifespans.
Son eventually abandoned the idea. He knew that shareholders of Softbank, a listed company, would never accept that scenario.
Son strongly believes in the future of renewable energy and has no intention of dropping his opposition to nuclear power.
“There are many alternatives to nuclear power,” he said. “I am opposed to bringing idled reactors back online one after another when we have yet to come up with a clear path to decommission them.”
By ATSUSHI KOMORI/ Senior Staff Writer
Harnessing this eternal wind to generate electricity, and transmitting it some 3,000 kilometers to Tokyo via cross-border grids in Asia, is the grandiose project known as the "Asia Super Grid."
It's the brainchild of Masayoshi Son, president of Softbank Corp., a Japanese telecommunications giant, who started championing renewable energy sources following the accident at the Fukushima No. 1 nuclear power plant.
Son also envisages sending electricity generated by different energy sources such as solar power in Mongolia and hydropower in Russia, on this vast super grid.
Son, 56, is the third richest Japanese, with personal assets estimated at $9.1 billion (910 billion yen), according to the 2013 ranking of the world's wealthiest people by U.S. business magazine Forbes.
His Softbank Group has grown into one of the largest business entities in Japan, with 3.4 trillion yen in sales in fiscal 2012, about 30 years after he founded Softbank.
Softbank’s reach has also extended beyond Japan. It acquired Sprint Nextel Corp., the No. 3 U.S. wireless carrier, in a high-profile takeover this summer.
Son laid out his vision for supplying Japan with power using renewable sources via high-voltage grids through Asia after the crisis erupted at the Fukushima No. 1 nuclear plant, the worst nuclear disaster in the nation's history, triggered by the Great East Japan Earthquake and tsunami on March 11, 2011.
He established a joint venture between Softbank and Newcom Group, a Mongolian investment firm, last year in a bid to translate his green-energy concept into reality.
The venture, Clean Energy Asia LLC, is conducting research on the wind and the amount of sunlight in the Gobi to prepare for electricity generation.
The company has acquired a permit to lease 220,000 hectares of land in the desert, an area exceeding that of the Tokyo metropolitan area, from the Mongolian government.
With a population of only 2.8 million, Mongolia has a land area of 1.56 million square kilometers, about four times that of Japan.
Purevdagva Nayanbuu, project manager at Clean Energy Asia, said wind power in the desert holds the potential to generate electricity equivalent to that produced by seven to 10 nuclear reactors.
“Our calculations show that it will be possible to produce 10 gigawatts,” he said. “Even if we exclude windless places, we will be able to produce 7 gigawatts.”
With little rain in the desert, he added, solar power also holds much possibility. Son put costs for wind power generation in Mongolia at 2-3 yen per kilowatt-hour.
“Even if we include costs to transmit it to Japan, we can produce electricity at a cost less than nuclear power (which is estimated at slightly less than 10 yen per kilowatt-hour),” he said.
The biggest of many hurdles, Son said, is the installation of a network of transmission lines across neighboring countries.
“Europe has a cross-border network of grids,” he said. “Why won’t Asia build one?”
The project envisions transmitting power to northern Kyushu via cables laid on the seabed after power generated in Mongolia passes through grids in China and South Korea.
To become a reality, Japan needs to build a cooperative relationship with China and South Korea. To lay the groundwork, Son has wasted no time in lobbying the leaders of both countries.
In May 2012, he visited South Korea to seek cooperation from President Lee Myung-bak for the project, explaining the estimated costs for wind power generation in Mongolia.
Two months before his meeting with Lee, Satoshi Shima, 55, Son’s close aide who runs the president’s office at Softbank, sat in on a meeting between former Prime Minister Yukio Hatoyama and Xi Jinping, the Chinese vice president slated to succeed Hu Jintao as China’s top leader. Shima, a former Lower House member of the Democratic Party of Japan, was on good terms with Hatoyama, who previously headed the DPJ.
Hatoyama suggested at the meeting that Japan and China work together in the field of renewable energy.
Another formidable obstacle Son will have to overcome is the virtual stranglehold that Japan's electricity industry holds.
Electricity brought in from overseas cannot be transmitted freely because regional electric utilities monopolize transmission lines in their jurisdictions.
To change the status quo, Son once mulled acquiring a regional utility, according to people close to him.
But that would entail the decommissioning of nuclear reactors that the potential takeover target owns. Son is staunchly opposed to nuclear energy.
The process would make it impossible for the utility to stay in business due to the huge losses involved in shutting down reactors before the end of their lifespans.
Son eventually abandoned the idea. He knew that shareholders of Softbank, a listed company, would never accept that scenario.
Son strongly believes in the future of renewable energy and has no intention of dropping his opposition to nuclear power.
“There are many alternatives to nuclear power,” he said. “I am opposed to bringing idled reactors back online one after another when we have yet to come up with a clear path to decommission them.”
By ATSUSHI KOMORI/ Senior Staff Writer
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