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MHI Signs MOU with China Huadian Electric Research Institute To Collaborate in Natural Gas-fired Distributed Generation System Promotion

No.1557
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Tokyo, July 10, 2012 - Mitsubishi Heavy Industries, Ltd. (MHI) has agreed with China Huadian Electric Research Institute (CHDER) of the China Huadian Corporation (CHD) to collaborate in promoting a natural gas-fired distributed generation system business in China and signed MOU. The collaboration aims at expanding use of a high-efficiency, low environmental burden gas engine cogeneration system, which generates and supplies both heat and power. Based on the agreement, MHI will take charge mainly of technology development, and CHDER will be responsible for the demonstration and realization of business models of the system.

The MOU of the collaboration agreement was signed by MHI, CHDER and MHI Engine System (Shenzhen), Ltd. (MHIES-SZ), an engine business subsidiary of MHI in China. The agreement will be reviewed every year assessing progress in pursuit of collaboration thoroughness.

MHI and MHIES-SZ will supply a distributed generation system using an advanced gas-fired cogeneration system and will provide technological consultation on its operation and maintenance. CHDER will, at the same time materializing a demonstration and pilot facility of distributed generation systems applying gas-fired cogeneration, study methods to link power grids with the distributed generation system as well as incentives and other favorable treatments in China.

Specifically, the MOU signed companies will select an appropriate project in China and launch a feasibility study of distributed generation system commercialization. In promoting expanded use of the system, MHI also envisages holding demonstrations of smart communities in Beijing, Hangzhou and other areas, together with CHDER and Huadian New Energy Development Co., Ltd. (HNE), that handles commercialization and investment in the distributed generation system business in the CHD Group. MHI will support CHDER and HNE by providing the "MEGANINJA," a transportable power generation system driven by a gas engine and configured like a container. Developed by MHI with proprietary technologies, the MEGANINNJA generator is capable of power generation within 24 hours after its arrival at the installation site and can also be used for cogeneration.

CHD, one of the five largest power producers in China, has been conducting research and development of distributed generation systems since 2003. In 2011 CHD was authorized by the National Energy Administration to establish the National Energy Distributed Energy Technology Research and Development Center, for which CHDER has carried out establishment works.

China's installed-base natural gas-fired power generation capacity in 2011 remains 32,650 megawatts (MW), or 3.1% of total generation capacity, of which CHD generates 4,730MW, the largest among Chinese power producers. China aims to realize natural gas-fired distributed generation in 1,000 locations in the country's 12th Five-Year Plan, and the National Development and Reform Commission (NDRC) has announced a plan to introduce a total of 50,000MW natural gas-fired distributed generation systems by 2020. Based on these Chinese initiatives, MHI expects a huge demand for high-efficiency, gas engine cogeneration systems.

Recently, MHI co-hosted the China-Japan Distributed Energy Supply International Forum in Shanghai together with the Shanghai Energy Conservation Association and Mitsubishi Corporation. At the Forum, in addition to actual examples in Japan that demonstrate economic efficiency of the distributed generation (gas-fired cogeneration) MHI presented its business development plan in China, focusing on the Shanghai area. The presentation subjects included strengthening of cost competitiveness in the engine business through a joint venture with Shanghai Diesel Engine Co., Ltd.; a planned gas engine cogeneration demonstration plant for Shanghai Diesel Engine; and enhancement of local engineering structures through the establishment of Gas Engine Distributed Generation Engineering Center within MHIES-SZ.

Going forward, MHI and CHD will continue their energetic activities to promote the recognition of the system by holding seminars and forums and pursuing further progress of the collaboration.