Nippon Telegraph & Telephone plans to venture into the Japanese renewable energy market. Nikkei informs that the Japanese telecommunications firm is cashing in over $9.3 billion to maximize its potential as a transmission network by 2030.
NTT intends to produce about 7.5 million kilowatts of power, which are around 12 percent of the country’s total renewable energy capacity last year.
This former parastatal is the first company with the capacity to run on a countrywide scale. Thus, it is venturing the country’s power supply market a few years after deregulation by the government four years ago. With the renewables attracting investment globally, the inception of the NTT shifts the competitive dynamics.
NTT plans to invest $1 billion in this electricity production system for the next five years to widen their market and operation capacity. On the completion of this project, NTT will produce electricity enough to run all Japan’s smallest island. This move will be a direct competition for this region’s power supplier, Shikoku Electric Power.
To minimize inappropriate competition, NTT will be selling its electricity directly to consumers. The company has a strategy of utilizing its 7300 telephone exchanges countrywide as micro-generators. These exchanges will have storage batteries to act as depots for renewable energy. From these exchanges, the power is distributable to factories and commercial businesses neighboring them via the grids or NTT’s power lines.
NTT will be collaborating with Mitsubishi Corp. To meet the power demands of over 14000 stores in the jurisdiction of an axillary trading house called Lawson. NTT also plans to create massive solar and offshore wind power plants. One of NTT’s electricity units, called Anode Energy, will spearhead this expansion of activities.
The challenge with this NTT venture is that regional utilities have preeminence over the transmission lines impeding their utilization for other purposes. To solve this challenge, NTT is developing its transmission line network. NTT views the combination of telecommunications data with electricity data as a profitable venture that addresses both communication and power challenges. The renewable energy venture comes in as a boost for the telecommunications company whose operations were expanding at a slow rate.
The 7.5 million kWh of renewable energy that NTT will be supplying will surpass the three million kWh that Tokyo Electric Power Co. Holdings was preparing to provide in this upcoming decade. Currently, NTT produces approximately 300000 kilowatts of power.
Finally, the success of the NTT power project will catalyze the achievement of 25% renewable energy in Japan. This result may challenge the oligopolistic supplier network, thereby causing a drop in energy prices.