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Build the 'Tesla of the Sea': Zozo executive's next challenge
Masahiro Ito intends to use boats to connect offshore wind farms to power grids
A Japanese executive who made his name in fashion tech now wants to build electricity carriers to bring power generated offshore to cities. (Rendering courtesy of PowerX)
RYOHEI SHIMIZU, Nikkei staff writerOctober 17, 2021 14:00 JST
TOKYO -- Masahiro Ito uses the term "Tesla of the Sea" when he talks about his Tokyo-based startup revolutionizing the economics of wind power.
Ito built up some tech startup bona fides during his time as chief operating officer of Zozo, which operates Japan's Zozotown online clothier. The platform's Zozosuit, which customers put on so they can be photographed and measured for size, takes the guesswork out of ordering clothes online.
But Zozo's fashion-tech innovations will look like baby steps if Ito realizes his ambitions for PowerX. His Tokyo-based renewable energy startup intends to replace tankers that carry power generation fuel such as coal and LNG with electricity haulers.
"We will help the world shift from the era of transporting fuels," Ito said, "[to] a new era of transporting electricity itself."
The wind at his back is the Japanese government, which plans to install 10,000 megawatts of offshore capacity, equivalent to the combined output of 10 nuclear reactors, by 2030. By 2040, the government intends for Japan to be harvesting 30,000 MW to 45,000 MW of offshore electricity.
Today, underwater cables transmit the electricity to power grids. But laying such a cable costs 100 million yen to 200 million yen ($875,000 to $1.75 million) per kilometer.
PowerX has conceived of an alternative, something it calls a power transfer vessel, that it wants to codevelop with a major shipbuilder. The startup plans to build its first electricity hauler by 2025 and start operating it on a trial basis.
PowerX will select and announce its shipbuilding partner early next month. Ito, who resigned as Zozo COO and started PowerX this year, said the electricity tanker he envisions will allow wind farms to be built in areas now considered unsuitable to offshore power.
Its mission is to make power storage and transmission breakthroughs that will drive explosive growth in renewable energy. The company's vision, its narrative, is reminiscent of Elon Musk's rhetoric about Tesla, which has reshaped the auto industry's competitive dynamics.
PowerX's directors include Paolo Cerruti, a former Tesla executive and co-founder and COO of Northvolt, a Swedish battery maker, and Caesar Sengupta, a former Google executive.
According to the startup's business plan, PowerX's ships would allow offshore wind farms to be built farther out to sea since they would no longer have to be tethered to transmission lines. A 1 million kilowatt floating wind farm placed 100 km off the coast could be serviced by four 1,000 TEU (twenty-foot equivalent unit)-class carriers. Each boat would be equipped with storage batteries that could hold 2,000 kilowatt-hours of electricity.
"This kind of historic turning point comes only once every several decades," PowerX CEO Masahiro Ito says, adding he wants to capitalize by providing the "technology demanded by the times."
While the batteries charge, the ships would be moored at an offshore substation connected to each turbine. After the batteries are fully charged, the ships would set sail for an onshore substation, where the grid would suck up the electricity. The four ships would take turns charging and discharging their batteries. They would be powered by electricity or liquefied natural gas.
Since the energy output of a wind farm is highly dependent on the weather, a system to predict wind conditions would be used to make schedules for the carriers. When windless conditions are expected, the ships would not operate.
"The optimal operation schedule will be made up by artificial intelligence using weather forecasts and power demand estimates," Ito said.
A raft of challenges must be overcome if PowerX's unprecedented business plan is to work. In Japan, wind power development projects can be carried out only in areas designated by the government; operators are selected from among applicants.
Typically, major utilities, construction companies and trading houses form consortia that apply to carry out wind power projects. Ito said PowerX will try to join such a consortium after its first power transport vessel demonstrates its viability. But it is unclear whether Ito will be able to convince traditional and established players that his vision has merit.
It is also unclear whether it is cheaper to transmit electricity by boats than via undersea lines. According to Ito, PowerX's vessels will have a competitive advantage over cables because ancillary facilities for undersea cables will also be simplified. But his cost advantage argument has yet to be backed by reliable estimates since the total cost of building, staffing and operating a power transportation ship -- and equipping it with batteries -- is unclear.
When bad weather or other conditions make it impossible for the vessels to operate, a wind farm's utilization rate will decline. Serious disruptions in operating the boats could necessitate the laying of undersea cables at enormous additional costs.
A wind farm executive is skeptical of PowerX's plan. "Using cables will be much easier," the executive said. "I'm not sure whether this would work as a viable business."
The cost of building the first trial vessel is estimated to be 2 billion yen to 3 billion yen ($17.5 million to $26.2 million), possibly more. Building multiple special-purpose ships will be costlier still.
Initially, PowerX plans to raise around 10 billion yen. The company is in talks with major shipbuilders, automakers, large real estate companies and trading houses about possible capital and business alliances.
But PowerX's goals align with those of the Japanese government, which in July unveiled a draft of a basic energy plan that places great importance on renewables like offshore wind becoming the "main power sources" of the future. The plan calls for raising the share of clean energy to 36%-38% of the nation's total power output in fiscal 2030.
"This kind of historic turning point comes only once every several decades," the former clothing executive said. "I want to take on the challenge of promoting social reform driven by technology demanded by the times."
If his vision of shipping electricity to shore becomes reality, Ito would then be able to franchise his business model to shipbuilders around the world.
His system could also make it easier to deliver electricity to remote islands.
https://asia.nikkei.com/Business/Energy/Build-the-Tesla-of-the-Sea-Zozo-executive-s-next-challenge
Masahiro Ito intends to use boats to connect offshore wind farms to power grids
A Japanese executive who made his name in fashion tech now wants to build electricity carriers to bring power generated offshore to cities. (Rendering courtesy of PowerX)
RYOHEI SHIMIZU, Nikkei staff writerOctober 17, 2021 14:00 JST
TOKYO -- Masahiro Ito uses the term "Tesla of the Sea" when he talks about his Tokyo-based startup revolutionizing the economics of wind power.
Ito built up some tech startup bona fides during his time as chief operating officer of Zozo, which operates Japan's Zozotown online clothier. The platform's Zozosuit, which customers put on so they can be photographed and measured for size, takes the guesswork out of ordering clothes online.
But Zozo's fashion-tech innovations will look like baby steps if Ito realizes his ambitions for PowerX. His Tokyo-based renewable energy startup intends to replace tankers that carry power generation fuel such as coal and LNG with electricity haulers.
"We will help the world shift from the era of transporting fuels," Ito said, "[to] a new era of transporting electricity itself."
The wind at his back is the Japanese government, which plans to install 10,000 megawatts of offshore capacity, equivalent to the combined output of 10 nuclear reactors, by 2030. By 2040, the government intends for Japan to be harvesting 30,000 MW to 45,000 MW of offshore electricity.
Today, underwater cables transmit the electricity to power grids. But laying such a cable costs 100 million yen to 200 million yen ($875,000 to $1.75 million) per kilometer.
PowerX has conceived of an alternative, something it calls a power transfer vessel, that it wants to codevelop with a major shipbuilder. The startup plans to build its first electricity hauler by 2025 and start operating it on a trial basis.
PowerX will select and announce its shipbuilding partner early next month. Ito, who resigned as Zozo COO and started PowerX this year, said the electricity tanker he envisions will allow wind farms to be built in areas now considered unsuitable to offshore power.
Its mission is to make power storage and transmission breakthroughs that will drive explosive growth in renewable energy. The company's vision, its narrative, is reminiscent of Elon Musk's rhetoric about Tesla, which has reshaped the auto industry's competitive dynamics.
PowerX's directors include Paolo Cerruti, a former Tesla executive and co-founder and COO of Northvolt, a Swedish battery maker, and Caesar Sengupta, a former Google executive.
According to the startup's business plan, PowerX's ships would allow offshore wind farms to be built farther out to sea since they would no longer have to be tethered to transmission lines. A 1 million kilowatt floating wind farm placed 100 km off the coast could be serviced by four 1,000 TEU (twenty-foot equivalent unit)-class carriers. Each boat would be equipped with storage batteries that could hold 2,000 kilowatt-hours of electricity.
"This kind of historic turning point comes only once every several decades," PowerX CEO Masahiro Ito says, adding he wants to capitalize by providing the "technology demanded by the times."
While the batteries charge, the ships would be moored at an offshore substation connected to each turbine. After the batteries are fully charged, the ships would set sail for an onshore substation, where the grid would suck up the electricity. The four ships would take turns charging and discharging their batteries. They would be powered by electricity or liquefied natural gas.
Since the energy output of a wind farm is highly dependent on the weather, a system to predict wind conditions would be used to make schedules for the carriers. When windless conditions are expected, the ships would not operate.
"The optimal operation schedule will be made up by artificial intelligence using weather forecasts and power demand estimates," Ito said.
A raft of challenges must be overcome if PowerX's unprecedented business plan is to work. In Japan, wind power development projects can be carried out only in areas designated by the government; operators are selected from among applicants.
Typically, major utilities, construction companies and trading houses form consortia that apply to carry out wind power projects. Ito said PowerX will try to join such a consortium after its first power transport vessel demonstrates its viability. But it is unclear whether Ito will be able to convince traditional and established players that his vision has merit.
It is also unclear whether it is cheaper to transmit electricity by boats than via undersea lines. According to Ito, PowerX's vessels will have a competitive advantage over cables because ancillary facilities for undersea cables will also be simplified. But his cost advantage argument has yet to be backed by reliable estimates since the total cost of building, staffing and operating a power transportation ship -- and equipping it with batteries -- is unclear.
When bad weather or other conditions make it impossible for the vessels to operate, a wind farm's utilization rate will decline. Serious disruptions in operating the boats could necessitate the laying of undersea cables at enormous additional costs.
A wind farm executive is skeptical of PowerX's plan. "Using cables will be much easier," the executive said. "I'm not sure whether this would work as a viable business."
The cost of building the first trial vessel is estimated to be 2 billion yen to 3 billion yen ($17.5 million to $26.2 million), possibly more. Building multiple special-purpose ships will be costlier still.
Initially, PowerX plans to raise around 10 billion yen. The company is in talks with major shipbuilders, automakers, large real estate companies and trading houses about possible capital and business alliances.
But PowerX's goals align with those of the Japanese government, which in July unveiled a draft of a basic energy plan that places great importance on renewables like offshore wind becoming the "main power sources" of the future. The plan calls for raising the share of clean energy to 36%-38% of the nation's total power output in fiscal 2030.
"This kind of historic turning point comes only once every several decades," the former clothing executive said. "I want to take on the challenge of promoting social reform driven by technology demanded by the times."
If his vision of shipping electricity to shore becomes reality, Ito would then be able to franchise his business model to shipbuilders around the world.
His system could also make it easier to deliver electricity to remote islands.
https://asia.nikkei.com/Business/Energy/Build-the-Tesla-of-the-Sea-Zozo-executive-s-next-challenge
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