Wednesday, April 6, 2016

Asia Super-Regional Grid Plan - Softbank Signs MOU with Korea, China, Russia Entities

Since the Fukushima disaster at least and the re-birth of discussion about Japan's electricity system and low penetration of renewables, there has been floating around an idea to establish a regional grid that would link Japan to other countries in Asia and, for example, allow wind energy in Mongolia or Hokkaido to provide electricity to factories in Japan or Korea.

Softbank's slide/idea -- showing retail electricity prices in the various locales.
Finally, last week, Softbank (whose CEO/founder, Masayoshi Son, is the driver of this idea in Japan through the Renewable Energy Institute (fka Japan Renewable Energy Foundation)) has signed an MOU with KEPCO of Korea, and Chinese and Russian grid operators, to conduct feasibility studies the idea.

So why are the China, Russia and Korea members of this team dominant in their respective fields -- grid operators -- but Softbank a newcomer, not directly involved with operating the grid in Japan? Perhaps the geopolitics of the idea give pause to the conservative Abe administration?  What if the Chinese turn off the interconnect, they must ask? Do they really want to be reliant on China and Korea to keep the lights on?

That said, if the idea proves economically feasible (indeed, a way to CUT electricity cost toward the Asia regional level longer term), accelerates introduction of clean energy throughout the region, reduces air pollution flowing to Japan from the continent (China), and if other parts of the world are integrating renewables onto the grid at a very high percentage of supply based on similar wide area grids, it may ultimately prove difficult for Japan to resist resist an idea that also happens to promote regional political and economic integration.

I am not holding my breath, but kudos to Son-san for not dropping his bold idea.

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