Arranged by Japan Renewable Foundation (JREF) with the support from Embassy of Mongolia, Japan. January 28 2014 at Shangri-La Hotel, Tokyo, Japan.
Asia Super Grid is a concept developed by Masayoshi Son, founder, chairman and CEO of Softbank as a consequence of the energy situation after the Fukushima accident in March 2011. A super grid connecting several countries in North East Asia (NEA), i.e. Mongolia, Russia, China, Korea and Japan, would bring many opportunities to the region. Mongolia, with vast renewable energy resources such as wind and solar could provide clean and (eventually) cheap energy to resource poorer countries such as Korea and Japan. Connecting today's isolated, national, grid structure would decrease vulnerability for blackouts due to demand peaks or natural disasters, and help identifying inefficiencies on the electricity markets in each country. However, the largest gain, shared by all speakers at the symposium, would be the opportunity to bring political stability to the region by linking them tighter together.
The seminar was opened by Prof. Tomas Kåberger and Mr Shima, Senior Vice President at Softbank. Mr Shima was utterly enthusiastic about the super grid, which started out as a “crazy idea” by Mr Son, but now has turned out to be “not so difficult”, neither from a technical nor business perspective. He used the 580 km long NorNed cable connecting Norway and Netherlands as an example of what has already been done. His presentation was followed by representatives from the involved countries and regions. Mr Delgertsogt, Secretary of State, Ministry of Energy in Mongolia emphasized the strong support from the Mongolian government on renewable energy in general and international connection in particular, and called the super grid a win, win, win situation for the environment, the region and Mongolia. Governor Khoroshavin from the Russian Sakhalin region, only 43 km from the northern Japanese border, emphasized the close collaboration between Russia and Japan as neighbours already today. Mrs Takahashi, governor in the northern Hokkaido prefecture noted the importance of considering long term potential when designing and decide on energy policies, and called attention to the contribution from local governments in the implementation of national and international policies.
The idea of an Asian Super Grid is not new. Prof Masuda from Japan Policy Council (JPC) – an organization “founded by business and labor leaders and scholars, aiming to create a grand design for Japan with an eye to the world and Asia for the next 10 years” – told about their ideas of the Asia Pacific Power Grid, including Japan and south east Asia, mainly the ASEAN countries, with Australia as main (solar) energy source. JPC has nurtured a dream about a super grid, “but are now ready to realize it”. He pointed to the need for “comprehensive” energy companies, including not only electricity but also gas and telecom fiber infrastructure in their concept. Mr Park from Korea Electric Power Corporation (KEPCO) leads North East Asia Super grid strategy and confirmed the positive and serious engagement from South Korea the development of a super grid. For KEPCO, the motivation is to eliminate shortage of electricity supply and find a business and cooperation model that is sustainable and will create a dense cooperation between NEA countries. His dream is to include North Korea in the super grid.
The “Gobitech”-project is the NEA response to the “Desertec” project in Europe, with the vision to feed Europe with clean energy from the Sahara desert. “Gobitech” means an estimated 100 GW renewable energy capacity from the Gobi desert and a super grid to supply the electricity to NEA, including China. In the second part of the symposium, researchers and business actors gave their view on the “Gobitech” and the Asia Super Grid. Mr Samadov from the Energy Charter Secretariat outlined the results from a technical, economic and political feasibility study of “Gobitech”. The report, launched the same day, is initiated and financed by the Ministry of Energy in Mongolia, JREF, Korea Electrotechnology Research Institute (KERI) and coordinated by the Energy Charter. The Energy Charter Treaty includes Eurasia, i.e. Europe, Russia, Japan (and Australia)) with the fundamental aim to strengthen the rule of law on energy issues. From the SWOT analysis large opportunities are identified, but also risks linked to huge initial capital costs, political vulnerability, capacity and water shortage (for solar thermal plants). However, the risks seem to be necessary to manage and the “business-as-usual” path not an option for the involved researcher such as Mr Yoon at KERI. Dr Pudlik from Frauenhofer Institute in Germany shared some experiences from projects in Europe and Middle East/North Africa.
The business sector was represented by Mongolia, Russia and South Korea. The Newcom Group is Mongolian version of Softbank, i.e. a private company, challenging public areas such as telecom, airlines and energy. They built the first wind farm in Mongolia, the Salkhit wind park, close to the capital Ulan Bator, and have now formed a joint venture with Softbank called Clean Energy Asia (CEA). Mr Gankhuyag, CEO of CEA, showed both enthusiasm and determination about their contribution to the Asia Super Grid and said that CEA had secured large areas of land in Gobi desert for future energy projects. Furthermore, Mr Demchenko from Russian energy investor JSC InterRAO and Mr Park from KEPCO confirmed the business interest in an Asian super grid.
To conclude, the message from the participants in the symposium was that the demand for, and opportunities accompanying, interconnectivity between the NEA countries overshadow the obstacles. It will secure energy, environment and political stability long term and all countries seem to gain from such a development. However, the obstacles on mainly political playing fields are severe and serious. It was also noted that none of the top Japanese decision makers were attending the symposium. An impression is that the political contacts are made on local level, such as between Hokkaido and Sakhalin and between east Korea and west Japan, and that business actors may pave the way for high level political contacts about shared interests. For example, Softbank plans to invite Putin this autumn as a first step.
The first initiatives towards a super grid are already taken, and it was agreed that the grid will be built in small steps. Although two important actors, China and North Korea, were not represented at the symposium, initiatives are ongoing also with these countries on different levels. “We are starting with dots, building the lines, and will end up with the network”, as the Mrs Ohbayashi, CEO of JREF, poetically described the progress at the end of the day. The spirit of this first symposium on the topic of Asia Super Grid is maybe best summarized by a quote presented by Mr Shima from Softbank; “Every great historical happening began as a utopia and ended as a reality”.
This short report was written by Helena Tillborg at Growth Analysis in Tokyo and is a part of Growth analysis assignment on foreign policy intelligence within the area of Sustainable Development.