ABB and Hitachi to form power grid HVDC venture in Japan

Swedish power equioment maker ABB and Japan's Hitachi announced today an agreement to form a joint venture to make high voltage direct current (HVDC) system solutions in Japan.

HVDC is a technology used for transmitting electricity between two grid systems. The supply side power is converted from alternating current (AC) to direct current (DC) before being transmitted, and it is then reconverted to AC in the receiving side system for use.

The system is ideal for long-distance transmission due to its ability to minimise electricity losses and to its lower space requirements and construction costs. It is also suited well for interconnections between two different frequencies.

The new ABB-Hitachi venture, to be based in Tokyo, will be responsible for the design, engineering, supply and after-sales services related to the DC system of HVDC projects based on  ABB's latest technologies to the Japanese market where Hitachi will be the prime contractor.

Hitachi and ABB will take equity interests of 51 percent and 49 percent respectively.

"This is the first step of a strategic partnership between Hitachi and ABB to contribute to the evolution of Japan's power network. Hitachi and ABB will explore further strengthening of the relationship and address opportunities to widen the scope for future collaboration," the companies said in  statement.

The joint venture is expected to commence operations in the coming months, subject to the necessary approvals and statutory procedures.

''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 said Hiroaki Nakanishi, Chairman & CEO of Hitachi, Ltd.

He said, "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.''

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.

Ulrich Spiesshofer, CEO of ABB, said, ''ABB pioneered HVDC 60 years ago and has continually pushed the boundaries of this technology. Our presence across half the world's installed base and our capability to develop and manufacture all major components of the HVDC value chain inhouse have put us in a leading position in the industry. We are proud to enter into this partnership with Hitachi with a solid reputation and extensive 100 year long experience in the Japanese market. Together we can build on our complimentary strengths to play our part in the evolution of Japan's power infrastructure.''

The global HVDC market has seen many projects using line commutated converter technology (LCC) HVDC systems since the 1970s, while the development of voltage source converter (VSC) systems has advanced as a new technology since around 2000.

In recent years there has been a particular focus on use for connecting renewable energy sources. This has seen an increase in VSC-HVDC transmission systems, that facilitate grid-stabilization, and the demand for new installations is increasing.

This technology is ideal for 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 meet grid code compliance ensures robust network connections regardless of application.

In Japan, there were nine HVDC projects up until 2006 deploying LCC . 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 off-shore wind farms.

Hitachi has participated in every HVDC project in Japan so far.

ABB pioneered HVDC technology, putting into operation the world's first commercial link in Sweden in 1954 and was again the first to introduce VSC technology (HVDC Light) in the 1990s.