By Shimpei Nakamura, Nikkei staff writer
Japanese cable maker Furukawa Electric will invest up to 100 billion yen (US$765 million) to boost production of underwater electric cables, with an eye on Japan’s push to bolster renewable energy infrastructure, Nikkei has learned.
The ability to transmit power across regions is key to making the most out of renewable energy sources like wind and solar, which are heavily influenced by weather.
As part of its goal to achieve net-zero carbon emissions in 2050, the Japanese government over the next decade aims to build a transmission grid with a capacity of around 10 million kilowatts — the equivalent of 10 nuclear reactors — under an initiative estimated to cost around 7 trillion yen.
A large part of this plan involves laying submarine power cables that connect the main island of Honshu, where key population hubs like Tokyo and Osaka are located, with the islands of Hokkaido and Kyushu, where much of Japan’s renewable energy is produced.
Furukawa Electric will consider expanding a plant in Chiba prefecture as well as building a factory in response to this push. Further details have yet to be ironed out, but the company is looking to roughly double output of submarine cables by fiscal 2027 or 2028.
Government demand for power cables is expected to persist until around 2050. To avoid excess capacity, Furukawa Electric will adjust investment plans with a close eye on the grid’s progress.
Furukawa Electric earned 105.7 billion yen in revenue from its energy infrastructure business for the year ended March 2022. It aims to turn underground and underwater cables into a business driver, with the goal of hitting 130 billion yen in revenue for the year ending March 2026.
Sumitomo Electric Industries, which leads Japan’s market for power cables, is also weighing increasing output.
“We will definitely need to make investments,” President Osamu Inoue said. Possible options include expansions to plants in Ibaraki and Osaka.
Daiwa Securities analyst Shinichiro Ozaki said such a large-scale government plan creates opportunities for cable makers.
“The key question for cable producers is whether they can create frameworks to secure profitable orders,” he added.
