Thermal Power Equipment Makers Seek To Adjust to Energy Transition

February 28, 2023|Power Plants

Alongside a national pledge to cut emissions and use more green energy, there’s one more indicator that shows Japan’s reliance on fossil fuels is on the wane.

At the end of last year, two major Japanese suppliers of equipment for coal and gas- fired plants announced plans to merge their thermal generation business. While both companies have “Mitsubishi” in their name, referring to their roots as once being part of Japan’s biggest industrial zaibatsu grouping, this is by no means a happy marriage, especially for the employees.

The fact that Mitsubishi Electric and Mitsubishi Heavy Industries (MHI) still went ahead and announced plans to integrate their thermal power business is significant. In a historical sense, it brings the multiple restructurings of the Mitsubishi electrical equipment empire back full circle – almost 100 years on from its first asset split. It also marks a turning point for Japan’s power equipment industry, reflecting the global trend of moving away from the burning of fossil fuels for electricity.

In the late 20th century, Japan had enough big players producing equipment for oil, coal and gas-fired power plants to field a sports team. The transition to cleaner energy has put tremendous pressure on the sector, which is now rapidly, if reluctantly, consolidating to survive. But will the merged entities find a place in the energy transition’s brave new world?

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