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AP Photo/Paul Sakuma
Voila! KR Sridhar, co-founder and CEO of Bloom Energy, poses in front of the company’s power servers at eBay’s California building in 2010.
KEEPING THE LIGHTS ON

SoftBank wants to offer Japan a solution to its energy identity crisis: fuel cells

Japan is slap-bang in the middle of an energy crisis—a near-nuclear meltdown and a catastrophic tsunami can do that to a country. Shinzo Abe’s government is facing widespread public opposition to restarting Japan’s shuttered nuclear reactors, but mounting natural gas costs are hindering the country’s fragile economic recovery. What’s an energy-hungry Japanese company to do?

Mobile phone firm SoftBank and US-based Bloom Energy want to offer a new solution. The two companies announced a joint venture on Thursday to supply advanced energy fuel cells that would allow clients to completely avoid the national power grid, minimizing the risk associated with Japan’s post-nuclear future. Bloom Energy’s fuel cells convert natural gas and biogas into electricity and can be lined up in an array with each 200Kw cell providing enough power to supply 160 homes.

Both partners have contributed $10 million to the new company, called Bloom Energy Japan, which will target public sector facilities and large companies as its US counterpart has done, in the hope that long-term, predictable contracts will trump Japan’s uncertain energy market. SoftBank, which has also invested in Japanese wind and solar plants, recently completed its hard-fought acquisition of US mobile carrier Sprint Nextel.

Abe’s government broadly supports nuclear energy and is under pressure from plant operators to re-issue licenses under new safety regulations, but large protests have stalled progress. Evidence of continued contamination from the stricken Fukushima Daiichi nuclear plant is unlikely to help matters in an industry that went from a 30% share of Japan’s power supply to just 3% since 2011. As a result, Japan has relied heavily on expensive natural gas in the last few years, to the detriment of its trade deficit.

For the first time in 20 years, Japan’s ruling party looks likely to claim a majority in both houses of parliament on Sunday, which will give Abe the power he needs to push through nuclear restarts. But that won’t make nuclear energy popular, and both Bloom Energy and SoftBank are hoping to capitalize.