ABB Celebrates Century Cooperation with China in Guangzhou

Guangzhou, July 3, 2007 - ABB, the leading power and automation technology group and one of the Fortune top 500 companies, celebrated its 100-year cooperation with China (1907-2007) in Guangzhou with local partners, announcing that energy efficiency will be the key task of the win-win cooperation to tackle energy resource shortage and global weather change in the future.

ABB Group Executive Vice President Anders Jonsson shaking hands with Guangdong Executive Vice-governor Yangsheng Zhong.

"While it's important for China to keep increasing power capacity by building more clean power stations of hydro, wind, etc, what is also urgent and beneficial to do is to lift industry energy efficiency to support the sustainable development of economy and society," ABB North Asia and China President Brice Koch told the press today.

"About 80% of the total power is wasted during the processes of power generation, power transmission and distribution. 50% could have been saved with good energy efficiency solutions," he said. "Out of all the causes for energy inefficiency, the most prominent one is technical design which accounts for almost 45%."

Currently, industries consume about 40% to 50% of the total power in the world. In China, the reported figure is as high as 75%.

ABB has been facing strong demand for energy efficiency technology and solutions in European countries for many years. The current increasing concern over energy shortage and global warming is creating a new race for energy efficiency across different regions in the world. This was well reflected by ABB's 89% income increase in 2006 and its net income of 163% increase in the first quarter of 2007.

In China, the central government and many provincial governments attached strategic importance to energy efficiency increase and emission reduction, in order to reduce 20% energy consumption per GDP unit and 10% emission according to the country's 11th 5-year plan.

ABB is among the first to promote energy efficiency in China. Its strong advocate for using HVDC technology to transfer bulk power from the three Gorges to Guangzhou and Shanghai greatly reduced power loss over long distances. ABB's i-bus intelligent building control system enabled an Ito Yokado store recovered its investment in 5 months with the cost saved on power, and ABB's drive system has helped save 30 billion kWh (enough to satisfy the needs of 21.4 million households) in China in the past 12 years.

In November 2006, ABB signed a strategic partnership agreement on energy consumption reduction with Guangdong Province, to help local enterprises improve the energy efficiency to support Guangdong's goal of reducing energy consumption by 16% per GDP unit by 2010. So far, ABB has provided trainings to over 500 companies in petrol-chemical, building material, iron and steel, textile and pulp and paper industries.

"It's important for government of all levels to promote the financial benefits of energy efficiency. Payback times can be extremely short but many businesses still focus on the purchase price when buying energy efficient equipment, instead of considering its cost over its entire lifespan. The purchase price of an electric motor, for instance, is just 1% of what the owner will spend on energy to run the equipment over its lifetime," said Brice Koch.

He said that the biggest reductions in emissions in the short term will mostly come from measures to run processes more efficiently. One example is that drives used to regulate the speed of motors can reduce motors' energy consumption by 50% in many applications. Yet less than 10% of motors are equipped with such a device.

Brice said that government should make energy efficiency a criterion of every project they fund, treaty they negotiate, research agreement they support, school or hospital they build, etc. Others will follow where governments lead.

"ABB believes that the greenest energy is energy saved. We look forward to enabling our Chinese customers to gain competitive edge via energy efficiency. We hope to combine our efforts with all local partners to keep the sky blue and the water clean," added Brice.

ABB has kept strong investment in R&D, even during its difficult times, so as to keep its competitive edge in three key aspects: energy efficiency, power grid reliability and productivity.

ABB started its cooperation with China in 1907 when providing the first boiler. In the past one century, ABB played an important role in supporting China's electrification and industry automation, by linking its name with the well known projects such as the Three Gorges, the South to North Water Diversion, the West to East Power Transmission, the Olympic Games construction projects, etc.

ABB (www.abb.com) is a leader in power and automation technologies that enable utility and industry customers to improve performance while lowering environmental impact. The ABB Group of companies operates in around 100 countries and employs about 108,000 people worldwide. ABB has a full range of business activities in China, including R&D, manufacturing, sales and service, with 11,000 employees, 25 joint ventures and wholly owned companies, and an extensive sales and service network across 38 cities. To know more about ABB, visit www.abb.com.cn.