Mitsubishi Electric grows its utility business 20% as it moves on PCI and an ABB venture
Serguey Asael Shinder1 min readMitsubishi Electric reported on Friday a 20% year-on-year rise in revenue in its utility-facing business segment and said it saw strong orders for transmission and distribution equipment in the latest quarter. The results come as the Japanese group prepares two moves aimed at North America.
The first is the acquisition of PCI Energy Solutions, which Mitsubishi Electric announced on 20 August at a price of $1.4 billion. According to Utility Dive, PCI's platform manages about 60% of US power generation. Its software serves utilities, independent power producers and other wholesale market participants in bulk power trading and settlement, generation and transmission operations, supply and demand planning and risk management. The second is an electrical components joint venture with ABB that the two industrial companies are preparing to launch.
Taken together, the steps add a software position in wholesale markets to a hardware business that already sells grid equipment, which is how Utility Dive describes the purpose of the purchase: to increase the group's exposure to North American wholesale power markets.
What it means
For grid operators and utilities the immediate effect is limited, since PCI's software keeps running whoever owns it. The longer question is concentration: a supplier of transformers and switchgear that also owns the scheduling and settlement software behind a large share of US generation sits on both sides of decisions about how the grid is built and run.