Son takes on atomic future with solar plans

Billionaire Masayoshi Son has a track record in taking on monopolies after building a business that opened up the nation’s telecommunications industry. Now he aims to shake up Japan’s power utilities amid the world’s worst nuclear crisis in 25 years.

News photo
Sun worshipper: Softbank Corp. President Masayoshi Son holds a news conference in Tokyo on May 30. BLOOMBERG

Son, the 53-year-old chief executive officer of Softbank Corp., plans to build solar farms to generate electricity with support from at least 33 prefectures. In return, he’s asking for access to transmission networks owned by the 10 regional utilities and an agreement that they buy his electricity.

Radiation continues to spew across at least 600 sq. km in the Tohoku region after the March 11 earthquake and tsunami damaged the Fukushima No. 1 nuclear plant. Prime Minister Naoto Kan said in May he will rethink the government’s previously stated goal to increase atomic power to 50 percent of the nation’s total from 30 percent. Renewable energy accounts for 10 percent, according to the Agency for Natural Resources and Energy, and Son wants that ratio tripled by 2020.

“The question is how this nation is going to survive after cutting nuclear power,” Son said at a government panel meeting Sunday.

“A framework should be designed in a way to make the power business open for anyone who has the will to start it.”

Son, who was born in Japan to Korean parents, became an advocate of renewable energy after the disaster forced the evacuation of more than 50,000 households and contaminated drinking water and food.

Tokyo Electric Power Co., the nation’s largest power company, has been struggling to contain the Fukushima plant crisis, which is now in its fourth month.

After meeting with Kan and attending government panels, he announced the plan May 25. Son also asked for land regulations to be modified to make 540,000 hectares of unused agricultural land available for solar power stations.

He declined comment on details of the solar project June 10, saying it’s at an early stage.

Son’s entrepreneurial streak emerged at the University of California, Berkeley, where he invented a voice-operated multilingual translator that he sold to Sharp Corp. for ¥100 million in 1979. He also capitalized on a burgeoning appetite for video games, importing bestselling Space Invaders machines from Japan and leasing them to cafeterias.

In the late 1980s, he offered a system enabling fixed-line phone users to choose operators with the cheapest charge, threatening the dominance of Nippon Telegraph & Telephone Corp., which was privatized in 1985. When Son introduced Softbank’s broadband Internet service in 2001, he grabbed customers from NTT with free modems and prices that undercut NTT’s by as much as half.

By 2006, Son transformed his Internet venture capital company into a full-fledged phone service firm similar to NTT via ¥2 trillion in acquisitions of Japan Telecom Co. and the Japanese unit of Vodafone Group PLC.

“Son broke through the telecom industry and has the financial power and connections to make things happen,” said Satoshi Nagata, a former president of Mitsui High-Tec Inc. who now runs VPEC Inc., a power solutions venture. “Opportunities in the solar industry will likely boom if Son succeeds.”

Tokyo-based Softbank plans to set up an affiliate that will use some of the company’s ¥3 trillion annual revenue to build solar power stations, Son said at a May 26 conference. One option would be to raise funds to invest about ¥80 billion into building 10 solar farms, each with about 20 megawatts of capacity, said Softbank spokeswoman Makiko Ariyama.

The combined 200 megawatts of power capacity will provide more than 10 times the total 19 megawatts produced at eight photovoltaic power stations run by regional utilities as of June 9. Japan produced 988 terrawatt hours of electricity in the year that ended March 31.

Prime Minister Kan pledged to generate 20 percent of the nation’s electricity through renewable sources by the 2020s as the nation rewrites its energy blueprint.

“We will do everything we can to make renewable energy our base form of power, overcoming hurdles of technology and cost,” Kan said in a speech in Paris before the Group of Eight summit last month. Japan aims to cut the cost of solar power generation to one-third of current levels by 2020 and one-sixth in 2030 and will install roof-top solar panels at 10 million homes, Kan said.

A revision of the energy plan means Japan will probably step up a campaign to encourage the use of solar cells at the expense of atomic power, Takashi Watanabe, a Tokyo-based analyst at Goldman Sachs Group Inc., wrote in an April report.

“I have very high expectations, especially for our thin-film solar cells, which had been limited to overseas sales,” said Mikio Katayama, president of Sharp, Japan’s biggest maker of solar cells. “Megasolar plants have been nonexistent here and it could expand business opportunities.”

Solar plants using 20 percent of unused agricultural land in Japan can have the generation capacity of about 50 gigawatts, almost matching that of Tepco, Son said.

“We can probably invite more companies to invest in our solar projects once a business model is set up,” said Yukiko Kada, governor of Shiga Prefecture, one of Son’s partners.

The central government reportedly may break up utilities’ regional monopolies and separate their power-generation businesses from distribution operations. A panel will begin discussing the issue this month as the government seeks to reform the power industry by 2020, the report said.

The 10 regional utilities handle generation, transmission and retail of electricity, maintaining a virtual monopoly over the nation’s power market. The power sector was partially liberalized in the late 1990s but few new companies entered the market, partly because of difficulties in competing against the utilities, VPEC’s Nagata said.

In April, Son pledged to donate ¥10 billion and his salary until retirement to help support disaster victims. Son earned ¥108 million and ¥1.3 billion in dividends in the fiscal year that ended in March 2010, Softbank said in June.

His 21 percent stake in the company is valued at more than ¥740 billion, according to data compiled by Bloomberg. Forbes magazine ranks him as Japan’s richest man.

“Mr. Son has made quite a stir,” Shiga Gov. Kada said. “We expect the government to make a change.”

The Japan Times

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