Power Systems Business Presentation

June 18, 2009
Koji Tanaka
Vice President and Executive Officer
President & Chief Executive Officer, Power Systems Group
Hitachi, Ltd.
1

Copyright © 2009, Hitachi, Ltd., All rights reserved.

1

Power Systems Business Presentation
June 18, 2009

Contents
１．Market Trends
２．Management Policy
３ Nuclear Power Business
３．Nuclear
４．Thermal Power Business
５．Renewable Energy Business６．Conclusion
2

Copyright © 2009, Hitachi, Ltd., All rights reserved.

2

Power Systems Business Presentation
June 18, 2009

Contents
１．Market Trends
２．Management Policy
３ Nuclear Power Business
３．Nuclear
４．Thermal Power Business
５．Renewable Energy Business６．Conclusion
3

Copyright © 2009, Hitachi, Ltd., All rights reserved.

3

1-1 Worldwide Trends for Reducing CO2■ Increasing expectations for power generation to play a central role indecreasing global warming.
■ Heightened investment in infrastructure for creating a low-carbon society.
Country/Region Government
Policy Trends

Global ＣＯ２ Emissions(Bn t)

70

Baseline scenario 62.0 bn
tons

60

% reduction
Powergeneration50
２７.０ bn tons

40
30
20
10
0
2005

38％
Industry,
households,
etc.

62％
50%-reduction scenario
１４.０ bn tons

2020 2030 2040 2050 (Year)

Source: Prepared based on International Energy Agency’s (IEA) “Energy Technology Perspective 2008”

4

Japan
p

■ 15% GHG reduction by 2020 (vs. 2005)■ 15 new nuclearlpower plantsl t■ “Green New Deal”
U.S.

- US$150 Bn earmarked for clean
energy; create 5 M jobs
■ Establishing CO2 capture facilities

Europemandatory for new thermal power plants■ 20% renewable
bl energy rate byb 2020■ Nuclear power cooperation agreements
between U.S./India, U.S./UAE
New
E
Economiesi ■ 15% renewable
bl energy rate byb 2020(China)Copyright © 2009, Hitachi, Ltd., All rights reserved.

4

1-2 Domestic Market Trends■Power Plant Investment(Tr yen)
2.5

146%

158%

Nuclear・Ongoing construction, mainly of
BWR, as core power source

160%

124%

2
1.5

100%

102%

1
0.5
0

2005

2006

2007

2008

2009

FY

2010

*FY08 estimated actual, FY09 and FY10 planned■Power Capacity Development Plans
Under
Construction(MW)

No. ofPlantsPlanned(MW)

No. ofPlantsNuclear

３,６７０

３

１６,５５０１２

ＢＷＲ*（２,７６０） （２）(１１,８９０)（９）Thermal

１０,３２０２０

１１,５２０３４

Total

１３,９９０２３

２８,０７０

４６

Thermal・Highly efficient new plants
・Increasing efficiency of existing
pplants
Increasing use of renewableenergy (Wind power, solar power)
Increasingly sophisticated power
distribution network

Source: Agency for Natural Resources and Energy, Ministry of Economy, Trade and Industry, Summary of Electricity Supply Plan, FY2009*ＢＷＲ：Ｂｏｉｌｉｎｇ Ｗａｔｅｒ Ｒｅａｃｔｏｒ

5

Copyright © 2009, Hitachi, Ltd., All rights reserved.

5

1-3 Overseas Market Trends■Electricity Generating
Capacity by Type

Increasing electricity demand overmedium and long terms (1.8 times)

1.8 times by 2030 （Compared to 2005）
Ongoing construction of coal-fired
thermal power plants

184%
6.7

((Tr kWh))

Renewable 100%energy 3.2
26
Nuclear 2.6
Oil
Natural gas 3.4
Coal

134%
4.9
3.0
4.9
1.0

7.1

9.5

3.8
6.8

Increasing demand for AQCS
0.9

0.9
13.6

２００５
２０１５
２０３０
（Approx.１７ tr kＷｈ）（Approx. ３２ tr ｋＷｈ）

Construction of new nuclear
power plants to create a lowcarbon society (72 GW by 2020)
Increasing use of renewableenergy（Wind power, solar power)

Source: U.S. Department of Energy“International Energy Outlook ２００９”
AQCS：Air Quality Control System

6

Copyright © 2009, Hitachi, Ltd., All rights reserved.

6

1-4 Power System Demand by Region■ Power System demand is increasing globally.

Eastern Europe, Russia, CIS

Europe

22→30

3→14
GW/Year

GW/Year
Middle East, Africa

15→19
GW/Y
GW/Year

North America

40→35
A i and
Asia
dO
Oceaniai

57→83
GW/Year

GW/YearSouth America

7→12
GW/YearLeft of arrow：’99 to ’06 actual orders, Right of arrow:’07 to ’20 orders (Commencement year basis)

7

Sources: Prepared from various statistical data, including IAE’s “World Energy Outlook 2008”

Copyright © 2009, Hitachi, Ltd., All rights reserved.

7

Power Systems Business Presentation
June 18, 2009

Contents
１．Market Trends
２．Management Policy
３ Nuclear Power Business
３．Nuclear
４．Thermal Power Business
５．Renewal Energy Business６．Conclusion
8

Copyright © 2009, Hitachi, Ltd., All rights reserved.

8

2-1 Key Policies
Assisting creating highly reliable, highly efficient social
infrastructure as a core for the Social Innovation Business.
Contribute to the Creation of a Low-Carbon Society
Promote development of innovative energy technologies
P
Promotet renewable
bl energy businessesb iPromote Globalization
N l
Nuclear:Collaborative
C ll bi creation,i
focusedfd on promisingi i overseas marketskwithi h GE
Thermal: Strengthen core Group companies in Europe, North America, Asia andexpand business

Increase Profitability
Bolster project management
Strengthen competitiveness in global markets
9

Copyright © 2009, Hitachi, Ltd., All rights reserved.

9

2-2
■

Contributing to the Creation of a Low-Carbon Society(CO2 Reduction Targets)

C t ib t tto Hit
ContributeHitachihi GGroup’s’ Environmental
E it l Vi
Vision:iAchieve 70% reduction of CO2 in power systems businessTransportation/consumer 10%

Hitachi Group Environmental Vision 2025
Reduce 100 million tons of CO2 emissions(FY2025)
CO2 Reduction Target from Hitachi Products Power 70%

2006

2015

2025

Industry 20%

Breakdown of CO2
reduction target（１00 mn t）

2025 (FY)

0
20
40
60
80

・Highly efficient thermal power plants
・Nuclear power plants
・Renewable energy
・Energy conservation

100 mn t

100
10(Million t-CO2/Year)

Copyright © 2009, Hitachi, Ltd., All rights reserved. 10

2-3

Contributing to the Creation of a Low-Carbon Society(Product and Technology Development)

Products and Technologies

Environmental Initiatives【Nuclear Power Plants】

Nuclear power
plant

Higher output, larger capacity

Nuclear poweruse

Longer life with advanced maintenance technologies

Faster development of future reactors
ABWR reactor
IGCC
development【Thermal Power Plants】

Clean use of coal

Higher efficiency（A-USC, IGCC development)

CO2 reduction
d ti

Mobile carbon
capture equipment

technologies

Carbon capture (Oxygen combustion,
combustion chemical absorption)
Low ＮＯｘ combustion, high-performance AQCS development

AQCS integrated
research facility【Wind Power, Solar Power】
Wind power systems, mega solar power systems

Use and stable supplyof renewable energy

Grid stabilization technologies, storage batteries
Downwind turbine

Power conditioner

ABWR：Advanced Boiling Water Reactor
A-USC：Advanced Ultra Super Critical
IGCC：Integrated
Gasification
Combined
Cycle
AQCS：Air Quality Control System
11

Greater sophistication by coordinating power systems
and ICT
Copyright © 2009, Hitachi, Ltd., All rights reserved. 11

2-4 Promoting Globalization
Sharp growth in overseas revenues through globalization.

Grow overseas revenues approx. 2.6 times (FY2006⇒FY2011)()(Bn yen)

1,000

1,000

566.7

845.7

865.8

185%

210%

FY2008FY2009 (Target)

2006

2007

500.0

260%

Overseas 100%
Japan
0

FY2006
2004 and priorGroup subbsidiaries worldwide

2003

2005

2008

2009

Established Babcock-Hitachi Europe GmbH (Now Hitachi Power Europe GmbH)2004

Established Hitachi Power Systems America, Ltd.
Acquired Mechanical Dynamics & Analysis Ltd.
Established Hitachi Power Africa Pty. Ltd.
Formed nuclear power business alliance and
JVs w
with
t G
GE

＝Europe and Africa＝Americas

12

FY2011 (Target))Acquired Meeraner Dampfkesselbau GmbH
Acquired Donges
Copyright © 2009, Hitachi, Ltd., All rights reserved. 12

2-5 Promoting Globalization (Main Group Companies)
Continuingg to localize operationsparound the world centered on core Groupp companiesp[Group Total: 17 companies (Japan), 23 companies (Overseas)

EuropeAsia

Hitachi Power Europe

Hitachi, Ltd.
BabcockBabcock-Hitachi K.K.
HitachiHitachi-GE Nuclear Energy, Ltd.

Hitachi Europe Ltd.

Americas

GE--Hitachi Nuclear Energy LLC
GE
Hitachi Canadian Industries

Dalian Hitachi Machinery & Equipment Co., Ltd.

DongasHitachi Power SystemsyAmerica,, Ltd.

Hitachi America, Ltd.

Mechanical Dynamics & Analysis

HITACHI (CHINA) LTD.)

Meeraner Dampfkesselbau

Babcock--Hitachi Dongfang Boiler Co.,Ltd .
Babcock

Babcock-Hitachi (Philippines) Inc.
BabcockInc
Asia Plant Maintenance

Hitachi Industrial Machinery Philippines

Core Group companies

Hitachi Asia Ltd.

Asia Project Engineering

Sales subsidiaries
S i subsidiaries
Serviceb idi i

Hitachi Power Africa
Clyde BabcockBabcock-Hitachi (Aust) Pty. Ltd.

Hitachi Australia Pty. Ltd.

●Expand coal
coal-fired
fired thermal power systems sales
centered on boilers (Europe top share)●Further develop Africa, Eastern Europe and otherregions with expanding demand

13●Expand thermal power business in China,
China Indiaand elsewhere through cooperation with partners●Expand into promising markets such as theMiddle East and India

Manufacturing and engineeringsubsidiaries●Meet increasing demand for renovation of existing
thermal power plants, AQCS, etc.
●Expand sales of ABWR with GE, and strengthen
uranium-enrichment business
Copyright © 2009, Hitachi, Ltd., All rights reserved. 13

2-6 Increasing Profitability

Strengthen Project management
Improve project management capabilities■ Increase project management, engineering tools, and number of project managers
Pre-order review and risk-prevention initiatives
Strengthen reviews through establishment of “Supervisory Office forOverseas Plant Construction Business”

Strengthen competitiveness in global markets
Strengthen capabilities of core Group companies worldwide■ Promote localization
Increase products with high market shares by expediting development■ One of the world’s largest coal combustion testing facilities, AQCS integrated research facility“Strengthening
Strengthening The Base ’08
08-’09”09 -GroupGroup Workforce Activity■ Global procurement and collective purchasing, quality improvement and reduction of loss cost, etc.
14

Copyright © 2009, Hitachi, Ltd., All rights reserved. 14

2-7 Power Systems Group Targets

FY２０１１ Targets
Revenue: 1 trillion yen
Operating margin: ５％
１,０００
８６５.８ Operating(Bn yen)Profitability

８００

５６６ ７
５６６.７

Hydroelectric Systems,
and Power & Industrial
６００
Systems, etc.

２００

Income margin
３％

８４５.７ Restore

１，０００

４００

OperatingpgIncome margin
５％

Nuclear Systems

Thermal Systems

Operating
loss

１８
２３
５９

２４

２１

２３

１９

５３

６０

２０
２０

６０
[Unit：％]

０
FY２００６

Overseas revenue ratio ３４％
15

FY２００８

FY２００９ target

FY２０１１ target

４２％

４５％

５０％
Copyright © 2009, Hitachi, Ltd., All rights reserved. 15

Power Systems Business Presentation
June 18, 2009

Contents
１．Market Trends
２．Management Policy
３ Nuclear Power Business
３．Nuclear
４．Thermal Power Business
５．Renewable Energy Business６．Conclusion
16

Copyright © 2009, Hitachi, Ltd., All rights reserved. 16

3-1 Basic Policy
Revenue
R

FY15：
FY15
：300 bnb yen
FY08:200 bn yen

・Steadily construct ABWRs in Japan・Develop business overseas

St dil promote
Steadilyt businessb i
ini JapanJ
Continue participating in construction of ABWR plants in Japan
Promote continuous maintenance business using advanced technologies

Strengthen overseas businessA l t sales
Acceleratel expansioni ini promising
i i markets
k t suchh as theth U.S.
U S andd theth Middle
Middl East
E tTarget countries that may introduce nuclear power plants in the future

Develop advanced technologies
Apply advanced construction technologies and highly efficient turbines
Increase output of existing plants, develop and promote advanced maintenance technologies

Develop ABWRs (increase output), ESBWRs, next-generation BWRs
17

ABWR：Advanced Boiling Water Reactor
ESBWR：Economic and Simplified Boiling Water Reactor

Copyright © 2009, Hitachi, Ltd., All rights reserved. 17

3-2 Promoting Business in Japan
Nuclear Power Plant Construction Plans in Japan
Predominantly ABWR plants
Steady progress with plans and construction

4 PWRs

11
ABWRs

*

Nuclear Power Plant Construction Plans

Shimane Nuclear Power Station Unit No. 3 (under construction)
The Chugoku Electric Power Co., Inc.
*Source: Agency for Natural Resources and Energy, Ministry of Economy, Tradeand Industry, Summary of Electricity Supply Plan, FY200918

Copyright © 2009, Hitachi, Ltd., All rights reserved. 18

3-3 Promoting Business in Japan (ABWR Construction)
Leading Player in ABWR Plant Construction in Japan

No. 1 market share in ABWRs（67%*）
Participating in construction of all ABWR plants
Start of
Operations
1996

TEPCO/Kashiwazaki Kariwa Unit No.6
TEPCO/Kashiwazaki Kariwa Unit No. 7

1997

Chubu Electric/Hamaoka Unit No. 5

2005

Hokuriku Electric/Shika Unit No.2

2006
：Full plant：Reactors：Turbines

Full plant construction

Chugoku Electric/Shimane Unit No.3
No 3

(Plan) 2011

Electric Power Development/Oma

World’s first full MOX(Plan) 2014

（FY）

19

First ABWRs* Includes plants under construction. Reactors and turbines counted as 0.5 of a plant each

MOX：Mixed Oxide Fuel
Copyright © 2009, Hitachi, Ltd., All rights reserved. 19

3-4 Strengthening Overseas BusinessW ld id N
Worldwide
NuclearlR
Renaissancei
Increasing overseas demand for nuclear
power plants

Ensure stable energy supply

Global warming prevention（ E
Expected Increa
ase From ）Nuclear Power Generation Volume'（GW） 06

72 GW by 2020 (Equivalent to 72 plants)

124
104
Increase

72

37
5

'10

'15

'20

'25

'30
（Year）

GW：Gigawatt, Source: “International Energy Outlook 2009” （DOE/EIA）, excluding Japan

20

Copyright © 2009, Hitachi, Ltd., All rights reserved. 20

3-5 Strengthening Overseas Business (Strategic Alliance With GE)

Alliance Goals
Obtaining License(License andcertification)

Optimal combination
Marketing

Production system(Products andconstruction
technologies)

Provide state-of-the-art BWR
plants to the global market

Optimal Framework(U S design certification already obtained)
GEH ：License (U.S.
Hitachi：Proven abundant construction track record, equipment supply
GNF ：Supply and development of reactor cores and fuelDevelop Fuel Enrichment Business
GLE is developing a uranium-enrichment business (Laser-based)
Alliance with Cameco Corp., world’s largest uranium producer
21

GEH： GE-Hitachi Nuclear Energy, GNF：Global Nuclear Fuel
GLE： GE Hitachi Global Laser Enrichment

Copyright © 2009, Hitachi, Ltd., All rights reserved. 21

3-6 Strengthening Overseas Business (Expanding Sales of ABWRs ①)

Th Latest
The
L
ProvenP
Nuclear
N l
PowerP
PlantsPl
One of the world’s largest generation capacities (1,350 MW)

Proven operating results in Japang certification alreadyy obtained (GHE)()
U.S. design
Uses modular technique, latest construction technologies

Focus on Promising ABWR Markets (U.S., Middle East, etc.)

Apply proven systems and designs
Leverage abundant construction track record
Reactorpressure vessel
ABWR：Advanced Boiling Water Reactor

22

Copyright © 2009, Hitachi, Ltd., All rights reserved. 22

3-7 Strengthening Overseas Business (Expanding Sales of ABWRs②）

T
Targett New
N Markets
M k t andd Countries
Ct i Adopting
Ad ti Nuclear
N l
Power
P
India：Alliance with engineeringgg and construction majorj (GEH)()
China：Highlight ABWRs merits for energy diversification
Southeast Asia, etc.：Support plans to introduce nuclear power from 2020ppsite planning,pg personnelptraining,g etc., participateppin new plansp⇒Appeal23

1st ABWR Seminar for Thai Gov’t andPower Industry Representatives

Beijing, China
China International Exhibition on
Nuclear Power Industry

March 2009
(Approx. 400 people/ongoing program)

April 2009
（Attracted approx. 3,000 visitors)

Shimane Unit No. 3 ABWR Construction
Site Visit by Overseas Parties

Held 18 times for 80 people
from 6 countries(Hitachi guests received FY2008)
Copyright © 2009, Hitachi, Ltd., All rights reserved. 23

3-8 Development of Advanced Technologies

Hitachi’sHit
hi’ advanceddd ttechnologies
h l i ffor iincreasing
i reliability
li bilit
and competitivenessKey equipment supplied
from within Group

Advanced
construction technologies

Increased reliability
Greater competitiveness
Advanced maintenancetechnologies

24

Stronger manufacturing
capabilities

Copyright © 2009, Hitachi, Ltd., All rights reserved. 24

3-9Development of Advanced Technologies(Key Equipment Design and Manufacturing)

Equipment Design and Manufacturing

Information and Control
Systems Div.

Supply key equipment from Hitachi Group
Continuous supply of reactor equipment
Babcock-Hitachi K.K.
Central Operation and Control Board

Reactor pressure vessel

25

Hitachi Works

Hitachi Plant Technologies, Ltd.

Hitachi Works

Hitachi Works

Nuclear reactor equipment

Internal pumps

Turbines

Generators
Copyright © 2009, Hitachi, Ltd., All rights reserved. 25

3-10

Development of Advanced Technologies(Construction Technologies)

I
Increasing
i Sophistication
S hi i i andd Efficiency
Effi ifeaturingfi theh Latest
L
Technologies
T h l iAutomated and high-quality construction
management using RFID

Modular construction
Upper Dr
Drywellell

Generator Stator
Access management
Installation registermanagement etc.
management,
etc（Approx. 650 tons）（Approx. 400 tons）
IC chip（0.4mmsquare））
Tag antenna

54mm

Operator ID
RPV Pedestal

Product ID

Hydraulic Control Units Room Module

Measurement equipment
ID（Approx. 400 tons）

26（Approx. 300 tons）

RFID：Radio Frequency Identification
Copyright © 2009, Hitachi, Ltd., All rights reserved. 26

3-11

Development of Advanced Technologies(Advanced Maintenance Technologies)

Development of Advanced Maintenance Technologies
Advanced Maintenance Market
Extend life
life：Life
Life 40 years ⇒ 60 years
Increase output: 100% ⇒ 120%

Technology synergies with GEH

・Noble Metal Chemical
Addition (NMCA)
・Stress improvement (ReNew)
Developing Output-Raising Technologies

Advanced Stress Improvement
T h l iTechnologies

・Narrow passage WJP・IHSI technique・Highly reliable dryer・Highly efficient jet pump
More Advanced Inspection Technologies

・InspectionIti robotsb t (Remotely(Rt l operatedt d vehicles
hi l (ROV))・Ultra-sound damage analysis/Eddy current analysis

Thrusters for proceeding
left/right rotating andleft/right,
going up/down

Multi-joint-type
u t jo t type
WJP

WJP
J for
o CRD
C
stub
tubes/ICM.H

WJP：Water Jet Peening, IHSI：Induction Heating Stress Improvement
CRD：Control Rod Drive, ICM.H：In Core Monitoring Housing
NMCA：Noble Material Chemical Addition27

Larger thrusters
CameraReactor bottom ROV
Copyright © 2009, Hitachi, Ltd., All rights reserved. 27

3-12Development of Advanced Technologies(Stronger Manufacturing Capabilities)

S t
Systematicti St
Strengtheningth i off Manufacturing
M f t i Capabilities
C biliti
Expanded design wing (2006), extended reactor building production (2006, 2008)
Introduced large turnturn-mill
mill machine (2006)
Hitachi Utility Steam Test Leading facility (2009)
Installed laser welding machine, control rod earthquake-resistance testing
facility (2009)<Plan>
Control rod and control rod drive testing facility
Strengthen machine processing facilities, extend reactor
building production

Control rods

28

Nuclear Reactor Equipment (Top Guide)

Hitachi Utility Steam Test Leading facility
Copyright © 2009, Hitachi, Ltd., All rights reserved. 28

3-13

Development of Advanced Technologies(Development of Future Reactors)

A l
Accelerate
Development
D l
U
Using
i CoreC
Technologies
T h l iReactor Type(Output)

Recirculation
MethodSafetySystem

'80
80

'90
90

Development

ABWR

Forcedcirculation

Activesafetysystem

'00
00

FY
'10
10

'20
20

'30
30

'40
40

Construction（1,350 MW）【Raise output】 Development

Construction（1,500 MW）
PassiveESBWRNaturalsafetyy（1 550 MW） circulation system（1,550

NextHybrid
generation Forced
safetycirculation
BWR
systemDevelopment
pConstruction

Development

Construction（1,700-1,800 MW）
29

Copyright © 2009, Hitachi, Ltd., All rights reserved. 29

3-14

Development of Advanced Technologies(Hitachi’s Next-Generation BWRs)

Promote development as national project
Standardize specifications for basic performance and common requests fromall countries, aiming to develop global-standard reactors
Meet replacement demand in Japan from 2030
Increase electricity output（1 700 to（1,700t 1,800
1 800 MW）

Separation of reactor
building andcontainment vessel

Low-uranium reactor core
（10%：24-month operation）

SC structure
first containment
vessel（30-month
construction time)

Optimal mix of passive
and active safetysystems

Seismic-isolated
reactor building

SC：Steel Plate Reinforced Concrete

30

Copyright © 2009, Hitachi, Ltd., All rights reserved. 30

Power Systems Business Presentation
June 18, 2009

Contents
１．Market Trends
２．Management Policy
３ Nuclear Power Business
３．Nuclear
４．Thermal Power Business
５．Renewable Energy Business６．Conclusion
31

Copyright © 2009, Hitachi, Ltd., All rights reserved. 31

4-1 Basic Policy
Revenue
R

FY11
FY11：
：600 bn
b yen
FY08
FY08：
：450 bn yen

・Strengthen competitiveness of core coal-fired thermal power plants
・Expand products with No. 1 market shares and growing products
・Decrease ＣＯ２ emissions and atmospheric pollutants

Strengthen coal-fired power plant businessMaximize global performanceStrengthen ＢＴＧ integration capabilities
Manage projects rigorously and reduce costs
Expand medium-capacity gas turbine businessAccelerate business development on highly efficient
Hitachi gas turbines
Promote development of environmental technologies

IIncrease generationti efficiency
ffi i
Clean flue gases, capture CO2
32

BTG：Boiler, Turbine, Generator

Copyright © 2009, Hitachi, Ltd., All rights reserved. 32

4-2 Market Trends
Coal：Abundant reserves, little geographical dependence
Natural gas：Relatively few ＣＯ２ emissions

core power source for the world

major power source after coal
Global Generating Capacity

Proven Resource Reserves

Gl b l Electricity
GlobalEl t i it G
Generatingti Capacity
Cit
133 years

Coal

t ㎥）
60 years (117 tr

N
Natural
l gas

30
26.0

Others42 years (１,237.9 bn barrels)

Oil

20.6
0

50

Reserve Distribution by
Region
100%

20
100
150
200
Recoverable Source: “BP Statistics 2008”
years
North America
10Latin America
Europe and Eurasia
Middle East
AfricaAsia/Oceania

75%
50%
25%
0%
33

31.8

(Tr kWh)（847.5 bn tons)

Source: “BP Statistics 2008”

Oil Natural gas

Coal

18 0
18.0

22
20%
5%
41%

20
4
42

21 Natural
gas
3
Oil

3
43
40

Coal

0
2006

Source:Energy2010U.S. Department
2020 of2030“International Energy Outlook ２００９”
Copyright © 2009, Hitachi, Ltd., All rights reserved. 33

Power Plant Business
4-3 Strengthening Coal-Fired Thermal(Maximize Global Performance)

Hitachi Power Europe GmbH[HPE](Established Apr. 2006)

Hitachi, Ltd. (Hitachi Works)

Hitachi Power Systems America[HPSA] (Established Feb. 2005)

Hitachi Power Africa[HPA] (Established Dec.
Dec 2005)

Babcock-Hitachi K
K.K.
K [BHK]

Mechanical Dynamics & Analysis Ltd.
[MD&A] (Acquired Sept.
Sept 2005)

Collaborative creation withoverseas Group companies
and partners:HPE,HPA
HPE,HPA34:Hitachi, Ltd., BHK, etc.

Revenue
390 bnyen

・Expand scale,scale increase profitability
・Promote development ofenvironmental technologies:HPSA,MD&A
HPSA,MD&A

2007

520 bnyen

600 bn
yen

2009

2011
Copyright © 2009, Hitachi, Ltd., All rights reserved. 34

4-4Strengthening Coal-Fired Thermal Power Plant Business(Strengthen BTG Integration Capabilities ①)

Boiler Market Share (5 MW and Above)：2004 to 2008 Orders
GlobalGoba Boiler
Bo e Share
S ae

Share
S
a e in Regioneg oMarketNo. 1 share

MHI
4.0%

2004 2008
2004-2008
119.8GW

Babcock Harbin Foster& Wilcox (中国) Wheeler
(米)
(米)
6.1%
7.2%
6.1%

Source：McCoy Reports 2008
(Excluding Chinese and Indian markets)
35

EuropeDoosan(韓国)
10.7%（Rank：１st）Market size：

Alstom
(仏)
13.8%

4.2%
IHI
5.7%

Share: ３５％

Hitachi
22.0%

Others20.3%

Hitachi share

Approx. 35 GW
Share：１２％
North
America（Rank: 4th)
Market size：
Approx. 22 GW
Copyright © 2009, Hitachi, Ltd., All rights reserved. 35

4-5

Strengthening Coal-Fired Thermal Power Plant Business(Strengthen BTG Integration Capabilities ②)

No. 1 Global Share in DeNOx for Denitrification■Help prevent atmospheric pollution globally
・Decomposition of NOx→Prevent acid rain, photochemical smog

catalyst production facility■First Commercialization to Worldwide market

300

・1963: Developed titanium oxide-based catalysts
200with ammonia
（％）
100%
100
・1973: Commercialized DeNOx system
0■Develop and manufacture in-house
・Only
Only Hitachi can do as a boiler
manufacturer

05

250%

Production capacity
06

07

08

09

2008 Order ShareOthers 30.0%

Hitachi
28.0%■Global No.1 share

36

・Global No. 1 in cumulative deliveries Company C 6.0%Company B 18.0%
Company A 18.0%
・Expand production facility
Source: Hitachi estimate→ keep top share
36
Copyright © 2009, Hitachi, Ltd., All rights reserved.

4-6

Strengthening Coal-Fired Thermal Power Plant Business(Strengthen BTG Integration Capabilities ③)

No. 1 share in boilers and AQCS
Able to supply “BTG + AQCS” by Hitachi based on top-share products

Optimize Boilers, AQCS, Steam Turbines and Generators
・High-performance catalysts
・Integrated system (DeNOx
equipment, precipitator,
desulfurization equipment)

No. 1 sharein catalysts

・Highly efficient combustion, NOx・CO2

Boiler (B)ＡＱＣＳ

reduction
・Compatible with different types of coalNo. 1 shareiinboilers

Steam（Flue gas treatment system）

Electricity
Flue gas
石炭

Coal

水

水

Cooling water

Steam turbine (T)・Highly efficient and reliable
37

AQCS：Air Quality Control System

Generator (G)Copyright © 2009, Hitachi, Ltd., All rights reserved. 37

4-7

Strengthening Coal-Fired Thermal Power Plant Business(Manage Projects Rigorously and Cut Costs)

Rigorous Project Management
Strengthen control of operation, profit/loss, risk management
Increase and improve project management tools
Increase and improve high-speed, high-accuracy engineering tools
Train and increase number of project managers

Strengthen Cost Reduction Activities
Standardization, procurement with optimized engineering

38

Copyright © 2009, Hitachi, Ltd., All rights reserved. 38

4-8 Expanding the Medium-Capacity Gas Turbine Business
A l
Accelerate
B
BusinessiD
DevelopmentlC
Centeredd on Own
O
HighlyHi hl Effi
EfficientiE
Equipmenti■H-25 Series
・Orders （Cumulative127 units）
Units
120

Japan
Overseas
Cumulative
units

90
60

■80 MW・Up-scaledpmodel ofH-25 series turbine
・Greater efficiency as
replaces existing oiland gas-fired
gas fired turbines
turbines.
・Plan to deliver first replacement unit to
Kyushu Electric Power Co., Inc. (by Dec.
2009)

■AHAT＊2 Gas Turbine METI Assisted project・ Higher efficiency and lower cost

30

than Combined cycle
0 ～90 ～93 ～96 ～99 ～02 ～05 ～08
・Top-class performance in heavy-duty gas
turbines*1
・Low-NOｘ・Low
NOｘ combustors,
combustors compatible withdifferent fuels*1：Thermal efficiency of 34.8％ (when burning natural gas)

39・4 MW pilot plantachieved 43%* efficiency（*World first, figure
with correction)

22ｍ*2：Advanced Humid Air Turbine
Copyright © 2009, Hitachi, Ltd., All rights reserved. 39

4-9 Accelerating Development of Environmental Technologies
Atmospheric Pollutants

Emission-Reduction Technology Development

2005
2010
CO2 NOｘ SOｘ PM 2000
More efficient power generation

2015

2020

Highly efficient steam turbines (Increased efficiency and reliability)○

700℃-class (46%)A-USC
C l gasification
Coal
ifi ti pilot
il t test
t t

○
○

○

L
Large-scalel verification
ifi ti machinehi

750℃-class (48%)
C
Commercial
i l plantl tFlue gas cleaning○ Low-NOｘ combustion, high-performance AQCS（Higher performance)
CO2 capture

One of the world’s largest coal combustion
testing facilities

CO2 capture and storage technology (demonstration)

AQCS integrated research facility

PM：Particulate Matter, A-USC：Advanced Ultra Super Critical

40

Copyright © 2009, Hitachi, Ltd., All rights reserved. 40

4-10

Accelerating Development of Environmental Technologies(Increasing Generation Efficiency ①)

R i StRaise
Steam T
Temperaturet
anddP
Pressure tto IIncrease Effi
Efficiency
i（％）
Geneeration efficieency

５0（ ）Steam temperature
S
℃

700

Reduce CO2 emissions with USC
Sub-critical: - 7％ approx.
approxSuper critical: - 2％ approx.

USC construction trackrecordd・Japan: 8 units
・Overseas: 23 units(Incl. under construction)

40（Present Average efficiency worldwide: approx. 35%）

30

600

ＵＳＣ （Ultra Super Critical）：
Ultra super critical (Steam temperature
exceeds 566℃）
Walter Scott, Jr. Energy
Center Unit 4（Power Magazine “2007
Plant of the Year”）
）

500

1960
41

1980

2000

*SC (Super Critical）：Steam pressure at least 22.1MPa and steam temperature up to 566℃
*USC (Ultra Super Critical）：Steam temperature exceeds 566 ℃*Sub-Critical: Steam pressure less than 22.1MPa (Drum-type boiler)

2020
Copyright © 2009, Hitachi, Ltd., All rights reserved. 41

4-11

Accelerating Development of Environmental Technologies(Increasing Generation Efficiency ②)

High-efficiency Steam Turbines
High-performance nozzle blade

Optimized degree of reaction（Reduced loss through 3D rendering）（Increase efficiency by optimizing output instages）

Extended length of last-stage blade
High-performance nozzle blade/rotor
blade(Reduced loss via 3D rendering)

Low pressure
turbine（Increased annulus area to reduce loss)

High- to mediumpressure
turbine【Steam Cascade】
Convert rotor blades to CCBs
（Reduced steam leaks enhances
efficiency）

42CCB：Continuous Cover BladeLow pressure-loss cascade

High-performance
exhaust room

Wet steam flow
analysis

Copyright © 2009, Hitachi, Ltd., All rights reserved. 42

4-12

Accelerating Development of Environmental Technologies(Increasing Generation Efficiency ③)

700℃-class A-USC Power Generation
Increased steam temperature andpressure

Integrated Coal Gasification Combined Cycle (IGCC)
Conversion of coal into fuel gas

HeaderIncreased efficiency ofenergy-utilization

Reheater tube
S
Super
heatertube

Developed 700℃-class
Boiler・Designed pipes using new Main steam pipe・Developed welding technology

Fuel gas Carbon capture
Flue gas
Coal

E.ON
E
ON (Germany)
Demonstration plant
DesignSteam

Gasifier
Gas
Heat Recovery
Steamturbine Steam Generator turbine

Oxygenboiler materials(nickel-based(nickelbased Alloy 617)

Higher efficiency by gas turbinesand steam turbines

Developed With Electric Power Development Co., Ltd.
Oxygen-blown, single-chamber, two-stage swirling flow gasifier

Developed
p Alloyy for 700℃
Low-cost Ni-Fe-based
super alloy (FENIX-700)
for turbine rotors

High caloric gas,
high-efficiency gasification

Fuel gas・Coal Upper
・Oxygen

stage

EAGLE

・Coal Lower

METI Assisted Project・Oxygen stage

Gasifier

43EAGLE：Coal Energy Application for Gas, Liquid and Electricity

Copyright © 2009, Hitachi, Ltd., All rights reserved. 43

4-13

Accelerating Development of Environmental Technologies(Flue Gas Cleaning and Carbon Capture)

Flue Gas Cleaning

CO2 Capture

・Developed low-ＮＯｘ combustion technology (New-typeburners/new multi-stage air-injection method verified atexisting plants)

Combustion gas
Low-ＮＯｘ burner

・Joint development and field testing with European and
U.S. universities and power utilities
OxyOxy-combustion technology: Fortum (Finland),
Aachen University (Germany) Chemical absorption
technology: E.ON, E
Eｌｌectrabel (Germany), University ofNorth Dakota (U.S.)

Boiler furnace
H
HemwegPower
P
Station,St ti
Netherlands
N th l d・Developed AQCS for U.S. environmental regulations
Dry electrostatic
Desulfurization
precipitator

Heat
exchanger

Pilot tested with
Ameren (U.S.)

Pilot testing facility:
Wet electrostaticAmeren’s Duｃｋ Creek
precipitator
AQCS Power Station
Mobile chemical-absorption system (German Power station)

ＡＱＣＳ：Ａｉｒ Ｑｕａｌｉｔｙ Ｃｏｎｔｒｏｌ Ｓｙｓｔｅｍ

44

Copyright © 2009, Hitachi, Ltd., All rights reserved. 44Power Systems Business Presentation
June 18, 2009

Contents
１．Market Trends
２．Management Policy
３ Nuclear Power Business
３．Nuclear
４．Thermal Power Business
５．Renewable Energy Business６．Conclusion
45

Copyright © 2009, Hitachi, Ltd., All rights reserved. 45

5-1 Basic Policy
Revenue
R

FY15
FY15：
：200 bn
b yen
FY08：
FY08
： 25 bn yen

・Provide solutions to support the uptake of renewable energy
・Renewable Energy & Smart Grid Division to lead cross-organizational
efforts

Expand sales of wind power systems
Expand downwind turbine sales

Promote solar power systems
Provide large-scale solar power systems
Control technologies to harmonize with power grids

Develop storage battery systems
St up dStepdevelopmentlt iin conjunctionjti withith Battery
B tt
S
Systemst
Di
Divisioni iAdvance development of Smart Grid-related systems
Develop and expand sales of power system stabilization equipment and systems

Increase sophistication by coordinating electricity infrastructure technology and ICT
46

Copyright © 2009, Hitachi, Ltd., All rights reserved. 46

5-2 Initiatives to Promote Renewable Energy

Wind power, solar power and otherrenewable energies will contribute to thecreation of a low
low-carbon
carbon society, but…
■ Such power output is so unstable due to theweather, etc.
■ Further prevalence could destabilize the grid(transmission and distribution network)■ Promote initiatives across the Hitachi Group■ Strengthen collaboration in power systems and ICT fields

Hitachi, Ltd.

Supervisory Office for
Business Coordination
Power Systems Group
Renewable Energy &Smart Grid Division

Grid-related issues associated with the
spreadd off renewable
bl energy■ Grid stability■ Reverse power flow, etc.

Industrial Systems GroupNew org asof Apr.
p 09•蓄電池■ The key is to provide
solutions for these problems

47

Information & Telecommunication
Systems Group

Research & Development
Group

Battery Systems Division

Copyright © 2009, Hitachi, Ltd., All rights reserved. 47

5-3

Initiatives to Promote Renewable Energy(Key Equipment and Systems)■ Solar Power■ Power Grid Systems
Telecommunications networks/monitoring andcontrol systems/SVC/storage batteries
Telecommunications Network

SVC
Solar powersystems

Solar
power

Wind
power

Load

Load

SVC

High-voltage
power lines

Substation

Wind
turbines

SVR

Monitoring
and control
equipment

Low-voltage
Lowvoltagepower lines
SensorCommunications
nodePower conditioners formega-solarl systemstVoltageand current

Outputcommand

Storagebatteries■ Wind Power

Storagebatteries

Converters

Generators

Solar power
generation

ＳＶＣ
SVC：Static Var Compensator, SVR：Step Voltage Regulator

48

Copyright © 2009, Hitachi, Ltd., All rights reserved. 48

5-4 Expanding Sales of Wind Power Generation Systems■W ld Largest■World’sLt Downwind
D
i dT
Turbinesbi(O(Output
t t 2MW)
Provide system with Fuji Heavy Industries Ltd.
■ Increase output on mountains,
mountains hillsides and other areas
where wind blows upward using downwind turbines■ Designed to withstand typhoons and strong thunder■ Outstanding power control for grids■ Provided by Japanese manufacturers

D
Downwindi dT
Turbinebi F
FeaturestWind
directionWind
direction
1st Commercial Unit
(Completed Feb. 2008)（Kashima Works, Hitachi Chemical）

Downwind Turbines
Upwind TurbinesWind
direction

From plains to hillsides andmountains

To seas in future

Area

Downwind49

A. SeaB. Plains

C. Hillsides and mountains

UpwindCopyright © 2009, Hitachi, Ltd., All rights reserved. 49

5-5 Promoting Solar Power Generation Systems■ Use Accumulated Control Technologies to Harmonize With Power Grids

S
Smooththconnection
with power
gridgPower Grid

Solar power
generation
depends on
weatherPrevent lower power quality
due to output fluctuations
Power Conditioners

DCAC

Solar Power

Grid interconnection
systemStorage batteries
and gridinterconnection
systems

Voltage fluctuation control（Curb voltage fluctuation
due to variation in power
output)：Hitachi Group technologies
50

Prevent dropout during griddisturbance (FRT control)

FRT: Fault Ride-Through is a function the ensures continuous operationand grid stability in the event of a voltage or frequency fluctuation due toa grid accident.
Copyright © 2009, Hitachi, Ltd., All rights reserved. 50

5-6 Development of Storage Battery Systems■ Focus on the battery business with efforts spearheaded by Battery Systems Division■ Promote development to advance Social Innovation BusinessS i l IInnovation
Socialti B
Businessi
Industrial
machinery

Construction
machinery

Railway cars

Wind power
generation,
solar power
generationi●Lead storage batteries forwind and solar power generation（Shin-Kobe Electric Machinery Co., Ltd.）

Features ・Long life
・Easy Maintenance｢Batteries｣

MotorsConsumer
Power
tools

51

MobilephoneshGameconsoleslHomeappliancesHybridvehiclesInverters(Control)Automobiles
Plug-in hybrids
TrucksElectric
vehiclesCopyright © 2009, Hitachi, Ltd., All rights reserved. 51

5-7 Promoting Development of Smart Grid-related Systems■

D l andd Provide
Develop
P id Products/Solutions
P d/S l iin
i 5 Fields
Fi ld
Grid
control
Distributed powersource harmonization

Facility &investment
optimization

Higheradministrative
efficiency

Customer
services■ Coordinate Power Systems and ICTPower System
Infrastructure Technology

52

EMS
DMS

ICT Infrastructure
T h lTechnology

・ Power facility and・ Information systemmonitoring/control systems
・ Development, manufacturing andgmaintenance technologies

technology
・ Telecommunications
network integration
technology

SVC

Maintenance
保守計画
Plan Selection
策定

Education教育

保守
Maintenance
（検査）

設備情報
管理
Facility information(Inspection)

Facility
management
systems

Management

Wireless
無線

CondosHousesAMI
solutions

集合住宅
一般住宅
L 低圧お客さま
Low-voltagelcustomers

SVC :Static Var Compensator
AMI: Advanced Metering Infrastructure
EMS :Energy Management System
DMS : Distribution Management System
Copyright © 2009, Hitachi, Ltd., All rights reserved. 52Power Systems Business Presentation
June 18, 2009

Contents
１．Market Trends
２．Management Policy
３ Nuclear Power Business
３．Nuclear
４．Thermal Power Business
５．Renewable Energy Business６．Conclusion
53

Copyright © 2009, Hitachi, Ltd., All rights reserved. 53

6．Conclusion

Contribute to Creation of
a LowLow-Carbon Society
FY2011 Targets
Revenue: 1 trillion yen
Operating margin: 5%
Promote Globalization

54

Increase Profitabilityy

Copyright © 2009, Hitachi, Ltd., All rights reserved. 54

Cautionary Statement
Certain statements found in this document may constitute "forward-looking statements" as defined in the U.S. Private Securities Litigation Reform Act of 1995.
Such "forward-looking
forward looking statements
statements" reflect management
management'ss current views with respect to certain future events and financial performance and include any statementthat does not directly relate to any historical or current fact. Words such as "anticipate," "believe," "expect," "estimate," "forecast," "intend," "plan," "project" andsimilar expressions which indicate future events and trends may identify "forward-looking statements." Such statements are based on currently available
information and are subject to various risks and uncertainties that could cause actual results to differ materially from those projected or implied in the "forwardlooking statements" and from historical trends. Certain "forward-looking statements" are based upon current assumptions of future events which may not prove tobe accurate. Undue reliance should not be placed on "forward-looking statements," as such statements speak only as of the date of this document.
Factors that could cause actual results to differ materially from those projected or implied in any “forward-looking statement” and from historical trends include, but
are not limited to:- economic conditions including consumer spending and plant and equipment investments in Hitachi's major markets, particularly Japan, Asia, the United Statesand Europe, as well as levels of demand in the major industrial sectors which Hitachi serves, including, without limitation, the information, electronics,
automotive, construction and financial sectors;- fluctuations in product demand and industry capacity, particularly in the Information & Telecommunication Systems segment, Electronic Devices segment andDigital Media & Consumer Products segment;- increased commoditization of information technology products and digital media related products and intensifying price competition for such products,
particularly
ti l l ini theth Information
I fti & Telecommunication
T li ti Systems
S tsegment,t Electronic
El t i Devices
D isegmentt andd Digital
Di it l Media
M di & ConsumerC
P d t segment;
Productst- uncertainty as to Hitachi’s ability to continue to develop and market products that incorporate new technology on a timely and cost-effective basis and toachieve market acceptance for such products;- rapid technological innovation, particularly in the Information & Telecommunication Systems segment, Electronic Devices segment and Digital Media &Consumer Products segment;- exchange rate fluctuation for the yen and other currencies in which Hitachi makes significant sales or in which Hitachi’s assets and liabilities are denominated,particularlypy againstgthe U.S. dollar and the euro;;- fluctuations in the price of raw materials including, without limitation, petroleum and other materials, such as copper, steel, aluminum and synthetic resins;- uncertainty as to Hitachi’s ability to implement measures to reduce the potential negative impact of fluctuations in product demand, exchange rate and/or the
price of raw materials;- general socio-economic and political conditions and the regulatory and trade environment of Hitachi’s major markets, particularly Japan, Asia, the UnitedStates and Europe, including, without limitation, direct or indirect restrictions by other nations on imports, or differences in commercial and business customs
including, without limitation, contract terms and conditions and labor relations;- uncertaintyt i t as tot Hitachi’s
Hit hi’ access to,t or ability
bilit tot protect,t t certaint i intellectuali t ll t l property
t rights,
i ht particularly
ti l l thosethrelatedl t d tot electronics
l t i andd datad t processingitechnologies;- uncertainty as to the outcome of litigation, regulatory investigations and other legal proceedings of which the Company, its subsidiaries or its equity method
affiliates have become or may become parties;- the possibility of incurring expenses resulting from any defects in products or services of Hitachi;- uncertainty as to the success of restructuring efforts to improve management efficiency and to strengthen competitiveness;- uncertainty as to the success of alliances upon which Hitachi depends,
depends some of which Hitachi may not control,
control with other corporations in the design anddevelopment of certain key products;- uncertainty as to Hitachi’s ability to access, or access on favorable terms, liquidity or long-term financing; and- uncertainty as to general market price levels for equity securities in Japan, declines in which may require Hitachi to write down equity securities it holds.
The factors listed above are not all-inclusive and are in addition to other factors contained in Hitachi’s periodic filings with the U.S. Securities and Exchange
Commission and in other materials published by Hitachi.

55

Copyright © 2009, Hitachi, Ltd., All rights reserved. 55

56

Copyright © 2009, Hitachi, Ltd., All rights reserved. 56