REUTERS
 
Swiss engineering group ABB (ABBN.VX) said on Tuesday it had agreed to set up a joint venture with Hitachi (6501.T) to market high-voltage direct current (HVDC) power transmission equipment in Japan.
 
The two companies are hoping to profit from a renewable energy push in Japan, where the government said in April it aims to surpass previous targets to double total power generation from renewable energy sources to around 20 percent in 2030 from around 10 percent in 2012.
 
HVDC technology helps minimize electricity losses over long distance making it cheaper and more efficient to connect renewable energy sources, such as offshore wind power to the electricity grid.
 
"By enhancing and expanding the HVDC business through its partnership with ABB ... Hitachi will continue to contribute to the stabilization of Japan’s electric power grid," Chairman & CEO of Hitachi Hiroaki Nakanishi said a statement.
 
Hitachi and ABB will take equity interests of 51 percent and 49 percent respectively in the joint venture which will be based in Tokyo, the Swiss company said.
 
ABB was a pioneer in HVDC technology, building the world's first commercial link in Sweden in 1954. It has since been awarded around 100 HVDC projects, including a contract to deliver a 2,375 km transmission link in Brazil, the world's longest power line.
 
The joint venture is expected to get underway in the coming months, subject to the necessary approvals and statutory procedures.
 
(Reporting by Caroline Copley; Editing by Anupama Dwivedi and Jane Merriman)