Press Information
Hitachi, Mitsubishi Electric and Mitsubishi Heavy Industries Agree to Discuss
Tokyo, July 5, 2010 - Hitachi, Ltd. (NYSE: HIT / TSE: 6501, "Hitachi"), Mitsubishi Electric Corporation (TSE: 6503, "Mitsubishi Electric") and Mitsubishi Heavy Industries, Ltd. (TSE: 7011, "MHI") today announced that they have reached a basic agreement calling for the three companies to initiate concrete discussions toward consolidation of their hydroelectric power generation system operations in a quest to strengthen and expand related business. Going forward the three companies look to jointly establish an operational company and build up a coherent business structure by integrating their various activities pertaining to hydroelectric power generation systems, including marketing, servicing, engineering, development and design, in order to further develop the business aggressively.
Under these business circumstances, Hitachi, Mitsubishi Electric and MHI reached a common recognition that the most effective and expeditious means to strengthen and expand related business would be to pool their respective operating resources and engage jointly in hydroelectric power generation system operations. Through integration of their engineering, development and design functions, the three companies will secure the human resources to maintain and pass on to the next generation their technologies and expertise unique to hydroelectric power generation system business. With this initiative, the companies also will strengthen the competitiveness of their world-leading technologies in pumped storage power generation, particularly in a field where high speeds, large capacities and high heads are required. Especially in the area of variable-speed pumped-storage power generation*, which is superior in responding to fluctuations in electricity demand and therefore expected to attract rising market demand, the three companies aim to secure the world's leading position. For manufacturing, an optimal production structure will be established through organic coordination of the three companies' production facilities and development of overseas activities as well.
Through business integration, the three companies will secure knowledge of market needs precisely and strengthen and expand their hydroelectric power generation system business through development and provision of products offering the advanced technologies required. Through these activities, the three companies look to contribute further toward the realization of a low-carbon society and stable supply of electricity.
* Note: A pumped storage power generation system consists primarily of an underground power generation plant and two water reservoirs - on the upper and lower sides of the plant. By releasing the water stored in the upper reservoir into the lower reservoir and thereby driving pump-turbines, power is generated. By pumping up the water in the lower reservoir to the upper reservoir using surplus electricity when electricity demand is low, repetitive power generation becomes possible. A variable-speed pumped-storage power generation system, which is capable of instant adjustment of power generation, is regarded as a promising technology for large-scale power generation/storage systems that contribute to power grid stability.
Outline of New Company (as currently planned)
1. Operation commencement: October 1, 2011
2. Shareholders: 50%: Hitachi, Ltd.
50%: Two Mitsubishi companies(Mitsubishi Electric Corporation and Mitsubishi Heavy Industries, Ltd.),
with each company's shareholding ratio to be decided later.
3. Scope of business:
a. Marketing, installation and after-sale servicing of hydroelectric power generation systems,
for electric utilities both in Japan and overseas.
b. Engineering relating to hydroelectric power generation systems
c. Development and design of main components for hydroelectric power generation systems,
including water turbines, water turbine generators and control systems
N.B. The company name, representative, head office location, capitalization, etc. will be decided at a later date.
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Mitsubishi Heavy Industries (MHI) Group is one of the world’s leading industrial groups, spanning energy, smart infrastructure, industrial machinery, aerospace and defense. MHI Group combines cutting-edge technology with deep experience to deliver innovative, integrated solutions that help to realize a carbon neutral world, improve the quality of life and ensure a safer world. For more information, please visit www.mhi.com or follow our insights and stories on spectra.mhi.com.