Power 2011-Mitshubishi

Power Systems Business Operation
June 1, 2011
Masafumi Wani
Executive Vice President
General Manager
Power Systems
Contents
1. Progress of 2010 Business Plan
2. Trends in the Power Systems Market
3. Business Expansion with localization in Promising Markets
4. Strengthening the Service Organization
5. Product Development in Growing Fields
6. Actions for Restoration after Great East Japan Earthquake
Mitsubishi Heavy Industries, Ltd. owns all intellectual property rights concerning these materials.

Review of 2010
Orders: Secured the same level as the previous year.
Got orders for thermal power plants worldwide though the strict market condition has
been continued due to the yen appreciation etc.
Sales/Profits: Profits have increased on year on year basis.
Overcame sales decline and yen appreciation by cost reduction through business process
improvement and procurement.
Prospect for 2011

Demand is rising continuously in Asia and emerging countries. Demand is recovering in
North America and other industrial countries. Aim to get orders in an aggressive way.
(Unit: In billion yen)
Recover after
bottomed-out
Orders
Decline after Lehman Bros.
2010 Business Plan

1,200
1,300
900
700
700
2009 [Actual]
2010 [Actual]
2011 [Forecast]
2012 [Target]
2014 [Target]

Major activities and results in 2010
(1) Business Expansion with Localization in Promising Markets
- Plants of JV with Larsen & Toubro Limited (L&T) in India launched full-scale operation
producing Supercritical-pressure Boilers, Steam Turbines, and Generators.
- Build GT assembly plant in Georgia and Wind Turbine manufacturing plant in Arkansas
in the U.S.
(2) Boosting the Service Business System
- Promote service business with expansion of global network (e.g., Capital participation in
Italian company ATLA).
(3) Product Development in Growing Fields
- Began trial operation of J-series gas turbine, the worlds highest thermal efficiency model
- Promote development of large offshore wind turbine (applying hydraulic drive
technology through the acquisition of Artemis Intelligent Power,Ltd.).
- Completed construction of commercial production verification plant for lithium-ion
secondary batteries
(4) Review of Business Operation
- Business Integration in hydroelectric power generation system with Hitachi,Ltd. and
Mitsubishi Electric Corporation
- Began discussion with Taiwanese firm Auria on business collaboration in Photovoltaic

Emerging countries (BRICs, Southeast Asia,
Middle East etc.)
Demand for power sources continues to rise.

Nearly 80% of the increase that is projected to 2035
comes from an increase in demand in emerging
countries.
Coal firing is a major power source while the
diversification of power sources leads to an increase
in demand for natural gas-fired power generation.
(GW)
[Emerging countries:
Cumulative installed capacity forecast]
6,000
Coal
Gas
5,000
Nuclear
W ind
Oil
Hydro
4,000
Ot her
3,000
2,000
1,000
0
2008
2015
Choice of power source continues to be based on

efforts to balance the environment, economic
efficiency, and energy security (3E).
Unconventional gas (shale gas) is developed to keep

gas prices low.
The tightening of environmental regulations leads to

the abolishment of obsolete coal-fired power
generation. B Demand for GTCC increases.
CO2 price (environment)
Industrial countries (North America,

Europe, and Japan)
2020
2030
2035
(MHIs estimate from World Energy Outlook 2010)
Non-fossil fuel
(nuclear, wind etc.)
Natural gas
Scope of choice
of power source
Effects of shale gas
Coal
Natural gas price
Mitsubishi Heavy Industries, Ltd. owns all intellectual property rights concerning these materials. * Gas turbine combined-cycle power generation
3. Business Expansion with Localization

in Promising Markets

in Promising Markets (India)
L&T-MHI Joint Ventures in India
Joint Ventures with Larsen & Toubro (L&T)
Boiler production capacity: 4 GW/year
Turbine/Generator production capacity: 4 GW/year
L&T JV
LMB* (JV/boiler manufacturing)
LMTG* (JV/turbine manufacturing)
Opening ceremony was held as the Boiler plant and

Turbine plant began full-scale operation in January 2011.
700MW(Boiler, ST)
660MW(Boiler, ST)
700MW(Boiler, ST)
660MW(Boiler, ST)
2
800MW(ST)
MHI-India Engineering Center

(Subsidiary/GTCC Engineering)
Got Orders consistently
Ordered project
(Boilers (10 units) and Turbines (12 units))

*
Turbine plant
LMB: L&T-MHI Boilers Private Limited

LMTG: L&T-MHI Turbine Generators Private Limited
Boiler plant

in Promising Markets (United States)
Following Orlando Service Center in Florida, Savannah Machinery Works in
Georgia is being constructed in North America, a major market for Gas Turbines.
U.S. Savannah Machinery Works

4
Savannah
3
1
Savannah, Chatham
County, Georgia
Site area: 400 thousand m2
MPSA/OSC
1: Office
3: Rotor servicing plant
2: Gas Turbine Combustors

(hot gas path parts) plant
4: Gas Turbine assembly plant
Combustor manufacturing plant commenced full-scale operations

and Opening ceremony was held in May 2011.
Expanding factions of
Savannah Machinery Works
- Establishing system to avoid risk
from exchange rate fluctuation
- Reinforcing supply chain
Establish US-Japan production system

10
11

Expansion of Diamond Service Network
Americas
MPSA
OSC (Orlando Service Center)
SMW (Savannah Machinery Works)
ASIA
Europe/Middle East
MPSE
Maintenance Partners
ATLA
MHI
MPS-AP, MPS-T, MPS-I
MPSE
SMW
MPS-AP (HQ)
MPS-T
MPS-I
Maintenance
Partners
MPSA-LA
MPSA
OSC
MHI-MEX
Equity participation in ATLA
Business system strengthened in

Middle East and North Africa
Abu Dhabi, Morocco etc.
CBC
Expand service business through Diamond Service Network

[Service ratio]
31%
BFG Service
(Nanjing)
MHI Taiwan
Service Dept.
P.T. POSSI
Latest trend
MHI Korea
Service Dept.
Mitsubishi
Donfang Gas
Turbine
(Guangzhou JV)
EGAT Diamond
Service Co, Ltd.
MPSA
Mitsubishi Power Systems Americas
MPSE
Mitsubishi Power Systems Europe
MPS-AP Mitsubishi Power Systems Asia Pacific
35%
: Base
: Partner
2009
2014
12

Under the slogan CS First! (Customer Satisfaction First), attractive service is developed.
Europe
After the acquisition of Maintenance Partners, a Belgian company focused
on maintenance and services including field services, we have concluded
equity participation of gas turbine repair and manufacturing company in
Italy, ATLA, to further expand our service capability in Europe.
Southeast Asia
As a joint venture with the Electricity Generating Authority of
Thailand (EGAT), a new company for gas turbine component repair
shop (EGAT Diamond Service) is established.
May 2011: The repair factory begins operation.
North America
Besides Orlando Service Center (OSC), Savannah Machinery Works will commence its operation such as gas and
steam turbine rotor inspection, gas turbine component manufacturing, and large ST rotor manufacturing.
Middle East and North Africa

Morocco
Our service organization including field service and

shop capability is been developed in the Middle East,
where many deliveries were made.
Turkey
Saudi Arabia
Egypt
Abu Dhabi
13
14

Power Systems: Product portfolio
Natural gas
Coal
Renewable energy
Fuel
Characteristics
and issues
Well-balanced power source with

economic efficiency and
environmental-friendliness
Development of unconventional
gas stabilizes gas price and supply
Product
development
Gas price are higher than coal

price. It is important to increase
economy and reduce GHG
emission by improving thermal
efficiency.
Next-generation GTCC with

worlds highest efficiency
Coal is easy to be procured in the

world and fuel is readily available
at reasonable prices. In particular,
coal is a major power source in
emerging countries.
But coal emits a great deal of CO2
and establishing new coal facilities
is difficult in industrial countries.
More eco-friendly streamlining is
needed.
IGCC with worlds highest

efficiency
Eco-friendly and CO2-free power

source
Development of offshore wind

turbine is essential due to
constraints on onshore locations for
large ones.
Countermeasures for gridstabilization are needed because

power output depends on natural
conditions.
Highly-reliable offshore wind

turbine
Lithium-ion secondary battery
15

(Gas Turbine)
Contributing the realization of low-carbon society by pursuit of higher temperature and higher efficiency
=Highest efficiency in the world: Development of J series gas turbine=
Achieved 1,600 degrees Celsius with M501J at a

MHIs demonstration plant.
60%
Worlds highest thermal efficiency, over 60% is

projected.
G-series
CC efficiency
55%
(LHV%)
CC(LHV%)
Got order for M501J 6 units from Kansai Electric Power

Co., Inc. for Himeji No. 2 Power Station (First Units)
Begin commercial operation in October 2013
Strategic model in the GTCC market
Taking advantage of high economic efficiency by the
worlds highest thermal efficient technology
D-series
1200
Model
M501J
M701J
Frequency
60 Hz
50 Hz
CC* output
460 MW
670 MW
CC* efficiency
Over 60% (worlds highest level)
CO2 emissions
50% reduction from conventional coal-fired power plant

(comparison with MHIs power plant)
Planned shipment of 1st unit
2011
J-Series
F-series
1300
1400
1500
1600
1700
Temperature of turbine()
entrance (degrees)
Demonstration Plant at
Takasago Machinery Works
2014
* CC: Combined Cycle
16

(Clean Coal Technology)
Coal gasification/IGCC
Verified high reliability
Into the stage of commercialization and global expansion
Cumulative operating hours : over 10,500 hours
Availability : over 90%
Spread Japanese technologies to global markets

(coal-producing countries)
Gasification
furnace
Gasification
furnace
IGCC
Synthetic plant
Brown coal
Subbituminous coal
HRSG
Bituminous coal
Worldwide total
(844.1 bil. ton)
GT/ST
Europe
Gas
purification
(78.1 bil. ton)
United States
China
(242.7 bil. ton)
(114.5 bil.
bil. ton)
Japan
Other African
countries
(0.02 bil. ton)
Features of MHI's IGCC/coal gasification furnace
India
(56.5 bil. ton)
World's highest power generation efficiency

(in gasification combined power generation)
MHI's gasification system of low-grade coal(*) is
optimal to the production of liquid fuels and
chemical raw materials.
Columbia
Other Asian
countries
(41.9 bil. ton)
(7.0 bil. ton)
Indonesia
(4.3 bil. ton)
Australia
(76.6 bil. ton)
South Africa
(48.0 bil.
bil. ton)
Other South
American countries
(9.3 bil. ton)
Source : WEC Survey of Energy Resources 2008

BP Statistical Review of World Energy 2008
*: Brown coal, sub-bituminous coal and other kinds of coal that account for half of all
coal reserves and are not conventionally used due to their incompatibility with boilers
17

(Offshore Wind Turbine)
Market trends and Development of offshore wind turbines
The market of wind turbine continues to expand and is projected to reach 40 GW by 2020 (EWEA).
Last July, a memorandum on the development of low-carbon energy was signed with Scottish and
Southern Energy, a British company that developed a plan for the worlds largest offshore wind turbine
(32 GW). We will cooperate extensively with this company in this field.
Based on the above, a 5-7 MW hydraulic-drive, large wind turbine is being developed.
Acquisition of Artemis (Britain) leads to development of hydraulic-drive wind turbine

Artemis Intelligent Power, Ltd. (Britain) has been acquired, providing
access to Artemis proprietary and ingenious hydraulic drive technology.
Advantages of the hydraulic drive
Making large wind turbines required larger speed-up gears.
B This has become easier after the introduction of a hydraulic drive.
(Reduction of weight and improvement of reliability)
Combined with our wind turbine technology, a new hydraulic-drive wind
turbine is being developed. We expect it to be very reliable and competitive.
18

(Lithium-Ion Secondary Batteries)
Construction of Nagasaki Plant was completed in 2010, in preparation for the full-scale launch of the business of
lithium-ion secondary batteries.
Introduction to internal and external applications accelerates.
<Example>
For energy storage systems

100 kW battery-charging system
100 kW control rack
Application
20 kWh battery rack
Forklifts
- Anti-blackout measure
- Reduction of electricity demand at peak
times
Applicable to the maintenance of lifelines for
high-rise apartments etc. accommodating
nearly 300 households (elevators, feed-water
pump etc.)
Introduced to apartment in Kokubunji,

Tokyo
2 MW container battery-charging system
Demonstrative driving of electric bus
Demonstrative operation will be

commenced in July 2011.
Industrial vehicles
The system will reach the market

at the end of 2011.
Portable power source

For
vehicles
Emergency relief to victims

of earthquake disaster
Output: 100 W
Effective capacity: 390 Wh
(load of 300 W)
Supplied to electricity companies etc.

for use as emergency power source
19

(Marine Machinery and Engines)
<Project MEET > is underway to propose solutions for environmental regulations and
improve fuel efficiency.
(MEET stands for Mitsubishi Marine Energy & Environmental Technical Solution-System.)
MERS (Mitsubishi Energy Recovery System) for marine heat recovery

Collect energy from the exhaust of marine diesel engines to generate power on a ship.
MERS First Unit

Operation Demonstration
Steam
turbine
SSS
SSS clutch
Generator
Power
turbine Speed
reducer
Development of marine hybrid turbochargers
The worlds first-ever hybrid turbocharger has been

developed: the function of the generator is incorporated
in the turbocharger of the marine engine.
Energy from extra exhaust gas is used to generate power

on a ship. This helps save energy during a voyage.
r
ge
ar
h
oc
rb
u
T
to
ra
e
n
Ge
Converter
Inverter
20
6. Actions for Restoration After

Great East Japan Earthquake
21
6. Actions for Restoration after

The production facilities of our Power Systems were not affected by the Great East Japan Earthquake.
We are contributing to the restoration of damaged power sources and the supply of new emergency power.
Restoration of disaster-stricken power sources
(power generators delivered by our company*)
An Emergency Task Force was set up

immediately after the earthquake.
Using our Company-owned helicopter, we
began sending staff on Sunday, March 13 to
facilitate restoration.
To date, we have helped restore nearly 4.5
million kW of electricity.
Supply of new emergency power source

A total of five gas turbines have been urgently
supplied to Tokyo Electric Power and Tohoku
Electric Power.
Currently responding to requests from several
companies for the urgent supply of gas/diesel
engines.
The total number of workers we have sent to

the disaster-stricken power stations is more
than 9,000 persons/day.
At the same time, we have supplied
emergency relief to disaster-stricken power
stations and evacuation centers in neighboring
municipalities.
* Power sources delivered to Tokyo Electric Power, Tohoku Electric
Power and clients of diesel engine/gas turbine generators
22
6. Actions for Restoration after

Number and total number of workers sent to assist with restoration of disasterstricken power plants
Total 9,000
(persons/day)
Max: 240 persons
250
No. of workers
sent
8,000
200
7,000
6,000
150
5,000
4,000
100
3,000
[]
Total
(persons/day)
Number of[]
workers sent (persons)
Total
9,000
2,000
50
1,000
0
0
3/13
3/19
3/25
3/31
4/6
4/12
4/18
4/24
4/30
5/6
5/12
5/18
23
Forecasts regarding future performance in these materials are based on judgment made in accordance with information
available at the time this presentation was prepared. As such, those projections involve risks and insecurity. For this
reason, investors are recommended not to depend solely on these projections for making investment decision. It is
possible that actual results may change significantly from these projections for a number of factors. Such factors include,
but are not limited to, economic trends affecting the Companys operating environment, currency movement of the yen
value to the U.S. dollar and other foreign currencies, and trends of stock markets in Japan.
24
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Power Systems Business Operation

1. Progress of 2010 Business Plan

1. Progress of 2010 Business Plan

Prospect for 2011

2010 Business Plan

1. Progress of 2010 Business Plan

2. Trends in the Power Systems Market

2. Trends in the Power Systems Market

Demand for power sources continues to rise.

Choice of power source continues to be based on

Unconventional gas (shale gas) is developed to keep

The tightening of environmental regulations leads to

CO2 price (environment)

Industrial countries (North America,

(MHIs estimate from World Energy Outlook 2010)

Natural gas price

3. Business Expansion with Localization

3. Business Expansion with Localization

Opening ceremony was held as the Boiler plant and

MHI-India Engineering Center

(Boilers (10 units) and Turbines (12 units))

LMB: L&T-MHI Boilers Private Limited

3. Business Expansion with Localization

U.S. Savannah Machinery Works

3: Rotor servicing plant

2: Gas Turbine Combustors

4: Gas Turbine assembly plant

Combustor manufacturing plant commenced full-scale operations

Establish US-Japan production system

4. Strengthening the Service Organization

4. Strengthening the Service Organization

Equity participation in ATLA

Business system strengthened in

Expand service business through Diamond Service Network

4. Strengthening the Service Organization

Middle East and North Africa

Our service organization including field service and

5. Product Development in Growing Fields

5. Product Development in Growing Fields

Well-balanced power source with

Gas price are higher than coal

Next-generation GTCC with

Coal is easy to be procured in the

IGCC with worlds highest

Eco-friendly and CO2-free power

Development of offshore wind

Countermeasures for gridstabilization are needed because

Highly-reliable offshore wind

Lithium-ion secondary battery

5. Product Development in Growing Fields

Achieved 1,600 degrees Celsius with M501J at a

Worlds highest thermal efficiency, over 60% is

Got order for M501J 6 units from Kansai Electric Power

Over 60% (worlds highest level)

50% reduction from conventional coal-fired power plant

Planned shipment of 1st unit

* CC: Combined Cycle

5. Product Development in Growing Fields