Order Received for Cogeneration Power Plant in Beijing

Mar. 14, 2005

 Tokyo, March 14, 2005 – Kawasaki Heavy Industries, Ltd. today announced that it has recently secured a 6 billion yen order from China's Beijing Zheng Dong Electronic Power Group Co. to build Beijing's first full-dress natural gas-fired cogeneration power plant (gas turbine combined cycle).

 The 120 MW power plant, composed of two gas turbines, two heat recovery steam generators and a steam turbine, will be installed in Beijing's Jiuxianqiao Electronic Zone, an industrial/residential district, as part of the city's efforts to improve air quality. The plant is a heat and power variable system which provides steam in the winter when demand for heat is high and utilizes excess steam for power generation in summer. It is scheduled to be completed in November 2006.

 Beijing earlier set a goal to reduce SO2, NOx and CO2 emissions by restricting coal-burning power plants and promoting natural gas-fired power plants, and by improving the district heat supply systems. Many of the plants in the Electronic Zone, located northeast of Beijing and populated by a rising number of foreign-capital companies, are still using coal-fired compact boilers without desulfurization equipment. With an annual coal consumption of 400,000 tons in 2000, the town is estimated to have produced 2,200 tons of dust and 2,160 tons of SO2, and is considered one of Beijing's major sources of air pollution.

 The Kawasaki plant has been designated as a model project of Beijing's environmental conservation and energy-savings programs. It has also won the highest rank in the Clean Development Mechanism (CDM) Project* ratings by the World Bank.

*Clean Development Mechanism (CDM) Project
 CDM, established under the Kyoto Protocol, is a scheme under which developed countries can transfer the amount of greenhouse gas (GHG) emissions they have achieved through financial/technological assistance to their own unmet reduction commitments. The Kyoto Protocol allows the CDM and other international trading schemes of GHG reductions between developed and developing nations to promote GHG emission reductions on a global scale. In the World Bank's case studies and ratings of CDM projects in China, Kawasaki's project has been rated among the highest in its contribution to GHG emission reductions.