Mitsubishi Heavy Industries (MHI) and Hitachi have signed a collaboration agreement for distributed gas engine power generation systems business in China.
As per the agreement, MHI will transfer 35% of its shareholding in Mitsubishi Heavy Industries Engine System (Shenzhen) (MHI Shenzhen) to Hitachi.
MHI Shenzhen is wholly owned by the MHI Group, which conducts the engine and power generation business in China.
Following the transfer of shareholding, MHI Shenzhen will be renamed and converted into a joint venture company by the end of 2014. MHI and Hitachi will strategically evaluate the market for distributed gas engine power generation systems in China through this joint venture company.
The joint venture company will begin executing the distributed gas engine power generation system business through the collaboration with Hitachi in addition to the sales and after-market service business for engines and power generation sets hitherto undertaken by MHI (Shenzhen).
The newly formed company will develop solutions for businesses that provide a diverse range of energy services, including reliable operational systems, service maintenance and ESCO services, in addition to proposals for engineering, procurement and construction of cogeneration systems.
The diverse range of energy services are aimed at fulfilling the demands of a variety of customers with respect to heating, cooling and power requirements, energy conservation and other needs.
The joint venture is likely to be headquartered in Shenzhen, with a branch in Shanghai with a workforce of around 60 employees.
The Government of China, owing to growing demand for power, has announced plans to introduce distributed gas engine power generation systems with a total output of approximately 50GW by 2020.
Looking ahead, MHI and Hitachi will join forces to penetrate a full-scale entry into the distributed gas engine power generation systems business with the aim of expanding their market share.