Looking for 'Green Profits' in the Market– CATL’s Public-Private Venture with State Grid
The energy storage industry is welcoming heavier players into the fold.
The joint venture of CATL (Contemporary Amperex Technology,宁德时代, one of the biggest electric vehicle battery manufacturers in China) and the State Grid (国家电网) has recently been approved (link in Chinese). CATL and China State Grid Corporation will now work together – as the State Grid Comprehensive Energy Group – to increase efficiency in energy storage systems.
Currently, the group has a registered capital of CNY 30 million. 60 percent of shares belongs to State Grid, while 40 percent belongs to CATL.
At the same time, it has been announced that the general manager of the New Energy Business Department of the joint venture, Mr. Li Jie （李杰）, will also work as the legal representative. In addition, Tan Libin （谭立斌）, the president of CATL’s Energy Storage Business Department, has been appointed as the director.
In order to increase energy storage efficiency, the joint venture aims to build an energy storage industry chain by focusing on energy storage system integration, effectively connecting upstream and downstream industries. Moreover, it will research new energy consumption needs to form a mature new business model, achieving a balanced development of energy storage and the grid.
In the meantime, many market-oriented companies are also optimistic about the commercial prospects of the energy storage industry and are actively participating in this industry chain in different ways.
Several equipment manufacturing companies have already made arrangements for the energy storage business. For instance, Henan Pinggao Electric Co. Ltd. established a subsidiary energy storage technology company.
At present, the company is actively carrying out battery management and high-power energy storage converter research in order to serve power grid applications.
Previously, the company won a bid for a 100 MW battery energy storage demonstration project for the Henan Power Grid. The project completed the installation of energy storage systems in 16 existing substations in 9 prefectures and cities in the province and laid the foundation for the commercial application and sustainable promotion of energy storage in the power grid.
Influenced by these developments and the government’s encouragement of low-carbon businesses, some other firms are also seeking profit from the new industry. Earlier in March, Fujian Baicheng New Energy Technology Co., Ltd. also established a joint venture – Shanghai Kuaibu New Energy Technology Co., Ltd. – with CATL.
"This company's business focuses on related products such as integrated storage, charging, and inspection charging stations, and this provides a key means for CATL to expand the field of new energy industry infrastructure," the relevant person in charge of CATL said to Shanghai Securities News.
Moreover, CATL also set up a joint venture with Nebula Co., Ltd. The cooperation will be centered around the energy storage industry chain, including research and development and production of big data software services, battery management systems (BMS) and system integration.
Although the market participants are excited about the ‘Green’ benefit this underdeveloped sustainable industry might provide both to the environment and their pockets, the increasing number of new energy power generation projects might well attract new government rules and regulations – which might cut the profits.
However, most firms still believe that the development of the energy storage industry is still in its initial stages and that regulations will come after they have made substantial financial gains.