Swiss power and automation giant ABB has teamed up with Hitachi to gain a foothold in Japan’s high-voltage direct current (HVDC) market. The two companies have agreed to form a Tokyo-based joint venture that will be supply DC systems and services in Japan, with Hitachi as the prime contractor.
In the first step of a strategic partnership aimed at Japan's evolving power network, Hitachi will have an equity interest of 51 percent, and ABB will have the remaining 49 percent. The two companies will continue to explore the relationship further, looking to widen the scope for future collaboration.
“Since the first development in the 1970s, Hitachi has participated in every HVDC project in Japan and has continued to underpin the stabilization of the electricity grid,” said Hiroaki Nakanishi, Hitachi’s chairman and CEO. “I am confident that the establishment of a new company combining the strengths of Hitachi and ABB will provide a framework for the timely provision of the new technologies required by the Japanese HVDC market. By enhancing and expanding the HVDC business through its partnership with ABB, which has a strong performance record in the global market, Hitachi will continue to contribute to the stabilization of Japan's electric power grid.”
Ulrich Spiesshofer, CEO of ABB, pointed to ABB’s pioneering role in HVDC 60 years ago. “Our presence across half the world’s installed base and our capability to develop and manufacture all major components of the HVDC value chain in-house have put us in a leading position in the industry,” he said. “We are proud to enter into this partnership with Hitachi, with a solid reputation and extensive, 100-year experience in the Japanese market. Together we can build on our complementary strengths to play our part in the evolution of Japan’s power infrastructure."
The global HVDC market has been dominated by line commutated converter (LCC) technology since the 1970s. But more recent focus on HVDC to connect renewable energy sources has seen an increase in voltage source converter (VSC) systems, which advanced as a new technology around 2000, and facilitate grid stabilization.
VSC-HVDC technology is suited to long-distance underground and underwater power links and interconnections, and is increasingly being deployed across a range of applications. These include the integration of renewable energies from land-based and offshore wind farms, the mainland power supply to islands and offshore oil and gas platforms, city center in-feeds where space is a major constraint, and cross-border interconnections that often require subsea links. Its ability to comply with grid codes ensures robust network connections regardless of application.
In Japan, nine HVDC projects were carried out up to 2006, all of them using the LCC technology. Now, with the increasing introduction of renewable energy and innovation in electric power systems, demand for VSC-HVDC systems is expected to increase for applications such as wide-area power transmission grids and connection of offshore wind farms.
The new joint venture will combine Hitachi's sales network, project management expertise, quality assurance processes and delivery performance record with ABB’s state-of-the-art HVDC technologies, and contribute to innovation in electric power systems in Japan.