SoftBank’s Clean-Energy Goals Find Welcome in Mongolia’s Desert

  • Tokyo-based company considers building more wind in Mongolia
  • Mongolia projects part of SoftBank plan for Pan-Asia grid

SoftBank Group Corp. plans to build more wind projects in Mongolia as the company’s chairman, Masayoshi Son, pushes to connect countries across Asia with transmission lines to supply cheap, clean energy.

The Tokyo-based company’s first wind farm in Mongolia is a 50-megawatt project being developed with Newcom LLC in Mongolia’s Gobi Desert. The project is an outgrowth of a venture between Newcom and SoftBank’s clean-energy unit called Clean Energy Asia LLC that was set up in 2012.

SoftBank is now looking into two more wind projects in Mongolia, with plans to possibly add 200 megawatts of solar and wind at the site of its first project, according to Shinsuke Moriya, who manages SoftBank’s electricity business planning group. The expansion, capitalizing on Mongolia’s abundant supply of flat land and attractive wind resources, would be part of a plan to eventually build 7 gigawatts or more of wind in the country.

“We decided to start with a project of a size suitable for domestic power grids,” said Moriya. “It’s an important step forward, but it is also a stepping stone,” he said.

The 50-megawatt wind project is expected to cost about $120 million, with 70 percent financed through loans from the Japan International Cooperation Agency and the European Bank for Reconstruction and Development, according to Moriya.

Project Financing

It’s the first time JICA is co-financing a project with EBRD, which has experience in funding wind in Mongolia, Tetsuo Konaka, director general of the agency’s private sector partnership and finance department, said, adding that the agency is ready to support similar projects by the private sector.

“Our agency can take risks in financing developing countries such as Mongolia or low-income nations in Africa, where private banks may have difficulty entering,” Konaka said.  

SoftBank entered the clean-energy business following the 2011 Fukushima earthquake and tsunami and the resulting nuclear meltdowns. Son, the founder of SoftBank, also started advocating to link Japan with countries as far away as India to supply cheaper solar and wind power to countries with higher power tariffs.

“Back in 2011, we were the solo voice crying out for setting up the Asia Super Grid,” Moriya said. “But the idea is gaining traction and various kinds of planning is under way between countries.”

China has emerged as a strong supporter of interconnections. Chinese President Xi Jinping proposed discussions on establishing a global energy network to meet power demand with clean energy during his speech at the United Nations in September 2015.

In March, SoftBank agreed with State Grid Corp. of China, Korea Electric Power Corp. and Russian grid company Rosseti Pjsc to research and plan for interconnected power grids in Northeast Asia.

Energy Storage

Adding wind capacity for domestic use will help Mongolia reduce its carbon dioxide emissions. Coal supplied more than 90 percent of the country’s electricity in 2013, according to World Bank data.

At home, SoftBank has more than 300 megawatts of solar and wind in operation, and another 200 megawatts under development, according to Masanori Kinugasa, who manages the corporate strategy department at SB Energy Corp., SoftBank’s wholly owned clean-energy unit.

While SoftBank plans to add more renewables capacity and diversify into biomass, geothermal and small hydro, it’s also looking into managing energy storage.

The company has been taking part in a pilot project to supply excess solar power to storage devices and electric vehicles on a remote island off Nagasaki to address concerns about grids being overwhelmed by an influx of intermittent clean energy.

“We are aiming to reduce curtailment,” SB Energy’s Kinugasa said. “We don’t want developers to give up on the opportunity to produce power.”

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