Page 1 of
2 Powering
up Asia's super-grid By John A
Mathews
The integration of East Asia is a
topic of perennial interest - whether it be
monetary integration (much discussed in the wake
of the 1997 financial crisis), trade integration
(promoted via ever-expanding FTA areas) or even
political integration. But what is not widely
discussed (as yet) is actually the best hope for
effective integration - and that is energy
integration, via an Asian super grid linking the
enhanced electric power systems of China, Japan,
Korea, Mongolia and perhaps Russia.
Just
such an Asian super grid has been proposed - by
the charismatic Softbank CEO Son Masayoshi, driver
of Japan's post-Fukushima shift to a renewable
energy pathway. The first steps towards the Asian
super grid (ASG) were taken in October, when SB
Renewables, Son's new subsidiary specializing in
renewable energy, announced an agreement with a
company in Mongolia, Newcom, to develop a site in
the Gobi desert for a giant wind farm
that would feed renewable
power into the grid. [1]
It is anticipated
that by the end of 2012 SB Renewables and Newcom
will have identified the site for the first wind
farm in the Gobi desert through a joint venture,
Clean Energy Asia, established in March this year.
The proposed wind farm would be rated at 300
megawatts (the equivalent of a thermal power
plant), and could be operational as early as 2014.
Feasibility studies for three other sites have
already been commissioned, with power capacity of
7 gigawatts - or the equivalent of seven nuclear
power stations.
Newcom has already
established a track record, building Mongolia's
first wind farm in record time, and set to bring
it to fruition by the end of 2012. Mongolia is a
classic instance of a latecomer country powering
ahead through heavy utilization of its vast fossil
fuel reserves (mainly coal). It is a country
sharing major borders with China and Russia that
has had unprecedented flows of inward foreign
investment from companies like Rio Tinto to build
its coal export industry - much of that coal going
to power China's black industrial revolution.
But at the same time, Mongolia is seeing
the development of vast wind farms that promise a
genuine green revolution. Newcom, led by its
English-speaking CEO, Bayanjargal Byambasaikhan,
is creating a huge new wind farm at Salkhit, just
outside the capital Ulaanbaator, where 31 wind
turbines are being brought into commission to
generate 5% of the country's power needs (now
totally dependent on coal). [2]
Salkhit
Wind Farm
This is only the
start. Newcom and Byambasaikan see a future where
Mongolia's wind resources can be harnessed to
power not only its own development but also much
of China's and Asia's electric grids, earning
profits for Newcom and export earnings for
Mongolia.
Japan Renewable Energy
Foundation Son announced the Asian super
grid as one of the first projects of his newly
established Japan Renewable Energy Foundation
(JREF), set up in May 2011 immediately after the
Fukushima disaster. Son recruited the former head
of Sweden's National Energy Agency, Tomas
Kaberger, to head up JREF. At an important
conference staged in Tokyo on the first
anniversary of the Fukushima disaster, JREF
launched the proposal for an Asian super grid, in
conjunction with the Desertec Foundation, which is
backing a similar proposal linking renewable
energy generating sites in North Africa with
European power grids.
The breathtaking
scope of the ASG proposal is of a piece with the
other far-reaching initiatives taken by Son's SB
Renewables and JREF - including a series of solar
farms in Japan designed to take advantage of the
new feed-in tariffs launched in Japan on July 1st
2012.
Figure 1: Asia super grid proposal from
Japan Renewable Energy Foundation Source: Japan Renewable Energy
Foundation
The core idea is that wind
farms (and possibly solar farms as well) in the
Gobi desert can be linked via high-tension
transmission lines to Korea, Japan and possibly
Russia; to China; and thence (more speculatively)
to Taiwan, Thailand, the Philippines, and even
India. The costs of generating power in the desert
locations would be low, and provided the
transmission costs can be kept low enough through
utilization of high-capacity HVDC lines (which
China for example is installing under its plans
for grid upgrading under the 12th Five-Year Plan),
the power delivered in the various countries would
be competitive with thermal or nuclear power.
Figure 2: The Desertec
proposal Source: Desertec
Foundation
The same idea underpins the
proposal from the Desertec Foundation to link
European grids with solar power stations in the
deserts of North Africa (Figure 2). The Desertec
proposal has been championed by German firms
(despite some recent high-profile withdrawals),
and other firms in Europe - most of whom would
envisage being involved in the building of any
eventual interconnected grid utilizing renewable
power. The proposal has received a significant
boost since the Arab Spring uprisings, offering
North African countries like Tunisia, Libya and
Egypt new possibilities of generating energy to
power their industrialization and to have a
product to export as well.
Indeed there is
already an initiative linking Tunisia with Italy,
promoted by a consortium consisting of Nur Energie
(a British firm with a French name) and Top
Oilfield Services, an oil and gas engineering firm
operating from Tunisia (the TuNur consortium). The
Tunisian solar park would be rated at 2 GW, or
equivalent to two nuclear power stations. The
proposal calls for an undersea high-tension cable
linking the Tunisian solar park with the Italian
grid, as shown in Figure 3. [3]
In short,
the idea of the Asian super grid in itself is not
so far-fetched - and when I discussed the proposal
with Son at the Global Green Growth summit in
Seoul in May this year (where we were both
speakers), he was confident that the proposal is
sound and can be implemented. He outlined to me
the basic concept that drives it - free trade in
electric power.
Figure 3: TuNur
proposal for a first electric power linkage
between Italy and Tunisia Source:
Desertec Foundation
Basic concept
of the ASG The core driver of the Asian
super grid is the proposal to link the electricity
grids of China, Mongolia, Japan, Korea and
possibly Russia into a vast interconnected power
system. Such an IT-enhanced interconnected grid
will be able to accommodate the fluctuating inputs
from various renewable sources and match them to
fluctuating demand - thereby enabling renewable
sources to be scaled up to a level exceeding
incumbent fossil-fueled systems.
As in
Son's earlier ventures into IT, computing and
telecommunications, his strategy is to tackle
established monopolies and take advantage of
liberalization to create effective competitors
that sow the seeds of creative destruction. In the
case of the ASG, the established firms are the
large electric power firms (like Tepco in Japan or
Chinese giants like China Datang and China
Southern Power Grid Co), and the concept depends
on being able to break their quasi-monopoly
control over electricity markets by trading
electricity as a commodity between the established
(and enhanced) national grids.
Trading
electricity! Son put this revolutionary
idea on the table in Japan in hearings before the
Diet in April. "Let's connect Japan to other
countries and make them compete", he said. "We
import oil and gas. What's wrong with importing
electricity?". [4]
Indeed, what's wrong
with the idea? When Son Masayoshi and I met in
Seoul in April, he told me that he had asked
officials at Japan's Ministry of Economy, Trade
and Industry (METI) whether it was "illegal" to
import electric power, in competition with the
established monopolistic power generators such as
Tepco. He said the officials were nonplussed. They
told him that it wasn't legal, in the sense that
there were regulations covering it - but neither
was it illegal.
His intervention has
evidently sparked a scramble at METI to deal with
the prospect of a super-competitive electric power
market able to import renewable power from sites
such as Mongolian wind farms. This is meat and
drink to Son, who sparked such scrambles in his
earlier interventions via Softbank into the
information technology, personal computer and
telecommunications markets in Japan.
There
is one immediate obstacle. Japan's Electricity
Business Act has an article restricting foreign
companies from supplying electricity in Japan - so
that represents a legislative hurdle that would
need to be cleared if the ASG is to become a
reality.
Assuming Son gets the go-ahead to
import electric power, he foresees a relatively
simple initial step as involving a link between
Japan's southern island of Kyushu and South Korea
- calling for a 400 kilometer high-tension cable
embodying the latest 700 kV HVDC technology. This
cable length is comparable to the existing link in
Europe between Norway and the Netherlands (two of
the rare countries that have actually
interconnected their power grids), which is 580 km
long and was completed in 2008 (14 years after the
two countries agreed in principle to link their
grids). Obviously Son intends to move at a faster
pace than that.
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