Nippon Telegraph and Telephone Corp. has become the second player in Japan's telecommunications industry to express an interest in power generation through renewable sources.
Satoshi Miura, president of NTT, said the company intends to take advantage of the existing infrastructure among NTT group companies for possible electric power production using solar and other renewable sources.
"We are mulling the start of a power generation business," Miura told The Asahi Shimbun. "We are taking pride in our history, technological background and know-how unrivaled by other competitors and will exploit these assets to the maximum."
Masayoshi Son, chairman and CEO of Softbank Corp., has already announced his intention to work with prefectural governors to move into the electric power business.
Son has helped build momentum for a shift toward renewable energy sources from nuclear power since the March 11 Great East Japan Earthquake and tsunami crippled the Fukushima No. 1 nuclear plant, operated by Tokyo Electric Power Co., the country's largest utility.
For NTT, power generation is not an entirely new arena.
A former public enterprise, NTT had developed technology to secure power for telecommunications equipment on remote islands. NTT has been pushing to mount solar panels at its research institutes and some group company buildings in past years.
Based on that experience, the company has been involved in designing, building and operating a solar power generation system installed in factories through NTT Facilities Inc., a wholly-owned subsidiary.
The company is set to push solar power generation in many more areas and work with local governments in this endeavor.
NTT DoCoMo Inc., a mobile phone company, is also planning a foray into the electric power business.
Miura said that while NTT Facilities will be at the center of the power business, the NTT group also aims to secure a stable power supply to its telecommunications facilities by using natural gas and other resources.
"We are going to work out details of our possible electric power business while keeping an eye on the government's specific steps concerning the price for electricity at which utilities are required to pay and how long they will be obliged to buy," Miura said.
In August, the Diet passed special legislation on the so-called feed-in tariff system to promote the use of renewable energy. Under the new law, utilities will be required to buy electricity generated through renewable sources, such as solar and wind, at fixed prices and for certain periods.
The central questions for the program are how much utilities will be forced to pay and for how long.
"I believe no companies want to enter the electric power business unless they can secure profit margin of at least several percent," Son said, in an apparent attempt to keep the purchasing prices from falling low.
NTT echoed a similar stance.
New electric power companies will have to shoulder the cost of installing feeder lines to transmit power from renewable sources to the utilities' cables, an investment that could prove prohibitive for companies with limited funds.
Miura said nuclear power generation must be scaled back in Japan because building new nuclear power plants will not be easy.
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