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30. May 2007

MHI to License 1 MW Wind Turbine Technology to China, Entering into Chinese Market for Wind Power Generation Systems

Mitsubishi Heavy Industries, Ltd. (MHI) and Wuzhong Instrument Co., Ltd. (WUYI), a group company of Ningxia Electric Power Group Co., Ltd. (NXEPG), have signed an agreement under which MHI will license production technology of its wind turbine MWT 62/1.0 (also known as MWT-1000A), which has a rated power output of 1 MW (megawatt), to WUYI. The Chinese company has been looking for high-performance wind turbine power generation technology to accommodate strong electricity demand and, at the same time, to address environmental issues. MHI meanwhile has been seeking to establish a foothold into China's rapidly growing wind turbine market. The agreement between MHI and WUYI thus meshes the needs of both companies.

NXEPG is a midsized electricity provider established in June 2003. The company has generation capacities of 1,320 MW in thermal power and 162 MW in wind power, and also owns a wind turbine production facility. WUYI, the licensee, is a major NXEPG group company as well a major industrial valve manufacturer in China. Both companies have their headquarters in the Ningxia Hui Autonomous Region.

While the Chinese inland area where the Ningxia Hui Autonomous Region is situated has many hilly zones and offers abundant wind energy resources, transporting large-size wind turbines to the area is difficult. For that reason, a midsize wind turbine in the 1 MW class was selected for licensing. NXEPG, the parent company, plans to build its own wind power generation farm. The 1 MW wind turbines produced by WUYI will be supplied not only to NXEPG but also to other electricity companies for their wind farms.

The MWT 62/1.0, MHI's best-selling wind turbine with more than 700 units in operation globally, ranks among the world's highest-performance wind turbines in the 1 MW category. The MWT 62/1.0 is capable of generating power even at relatively low wind speeds thanks to its optimized blade structure and redesigned blade shape. With these improvements, in an environment where the annual wind speed averages 6 meters per second the MWT 62/1.0 can achieve 20% higher annual energy production (300 MWh/yr) than with MHI's conventional 1 MW wind turbines (MWT 57/1.0 or MWT-1000).

As of the end of 2006 China has total wind turbine installations equivalent to 2,588 MW, putting the country sixth worldwide in terms of cumulative wind turbine installations. In terms of new installations completed in 2006, China ranked fifth at 1,334 MW. In the runup to the 2008 Beijing Olympic Games, China is planning to expand its wind power generation capability at an annual rate of approximately 2,000 MW. In January 2006 it implemented a new Renewable Energy Law, and the country is now targeting wind turbine installations of 5,000 MW in 2010 and 30,000 MW in 2020.

Leveraging the collaborative relationships established through the licensing agreement, MHI intends to conduct further aggressive marketing activities of its wind turbines in China, which is fast becoming one of the world's leading wind turbine markets.

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