On the afternoon of March 24, 2023, Xi'an JD Energy Co., Ltd., in collaboration with Solarbe Global, successfully hosted the 1st JD Energy Distributed Energy Storage 2023 Ecological Partner Conference in Hangzhou. This groundbreaking event marked the nation's premier large-scale hybrid (online and offline) investment attraction conference within the electrochemical energy storage sector. The conference attracted substantial industry attention thanks to JD Energy's booming momentum.
Amid the global "carbon neutrality" trend and the rapid expansion of renewable energy sources such as photovoltaics and wind power, China's nascent energy storage industry is entering a phase of accelerated growth. The commercial and industrial energy storage market size has increasingly expanded, and the market has become a key battleground for numerous energy storage manufacturers. Against this backdrop, the conference, themed "Trillion-Scale Energy Storage, Walking Together," sought to establish a mutually beneficial energy storage ecosystem and an industrial community with a shared future. The aim was to foster collaborative growth and progress among ecological partners in the evolving energy storage landscape. Leading experts and partner representatives from the energy storage sector delivered insightful speeches, attracting nearly 500 attendees and tens of thousands of industry practitioners, both online and offline.
As new energy penetration rate has surged in recent years, wind and solar power generation accounted for 13.93% of China's electricity mix by the end of last year. This aligns with the International Energy Agency's third stage of the power system low-carbon transition, where wind and solar power generation constitute between 13% and 24% of the mix. Consequently, enhancing existing power facilities will be insufficient to accommodate further increases in wind and solar penetration rate, necessitating a comprehensive upgrade of power system flexibility. The optimal solution lies in the integration of electrochemical energy storage. As Chairman Xin Baoan of the State Grid Corporation of China highlighted in his article published in People's Daily, in response to the actual requirements of developing energy storage to improve the regulation capacity of power system, we will vigorously strengthen the construction of pumped-storage power stations with mature technology and actively support the large-scale application of new energy storage, striving to increase the installed capacity of pumped-storage and electrochemical energy storage power stations in the company's operating area from the current 26.3 million kilowatts to 100 million kilowatts and from 3 million kilowatts to 100 million kilowatts respectively by 2030.
JD Energy aims to collaborate with ecological partners in the quickly developing energy storage sector for mutual development. At the conference, JD Energy unveiled the "Starry Sky Plan," designed to comprehensively empower ecological partners regarding product strength, service strength, and pricing strength. Regarding product strength, JD Energy offers customers highly secure and reliable energy storage systems with lower BOS costs. Regarding service strength, JD Energy provides comprehensive technical support, proactive services, and training to ecological partners, ensuring operational guarantees throughout the power station's entire lifecycle. As for pricing strength, based on the monthly market benchmark price, JD Energy leverages its cost control capabilities to offer significant profit margins to its ecological partners. This ensures that various downstream links in the industry chain can revert to reasonable profit gross margins, fostering joint development and progress with ecological partners.
Zeng Shaojun, Secretary General of the All-China Federation of Industry and Commerce New Energy Chamber of Commerce, delivered an opening speech on the conference that due to constraints such as limited usage space and capacity, electrochemical energy storage, particularly lithium-ion battery storage, will be the preferred solution for distributed energy storage. As a pioneer in distributed energy storage, JD Energy, with its core advantages of extreme safety, high efficiency, reliability, grid friendliness, and intelligent operation and maintenance, effectively addresses long-standing industry challenges such as safety concerns, inefficiencies, and short lifespans, creating a value space characterized by high safety, reliability, and profitability for customers, positioning JD Energy for substantial growth and development in the future.
Zhou Yuan, Vice President and Secretary General of the PGO Green Energy Ecological Cooperation Organization emphasized in his speech that although individual distributed energy storage projects may be small in scale, they significantly benefit businesses and society. The potential for distributed energy storage development extends beyond specific regions like Zhejiang, Hainan, Guangdong, and Shandong; opportunities have emerged in the national energy storage market, including the distributed energy storage segment.
Peng Guiyun, former Director of the CHDER, emphasized in his speech that every new trend and change in the industry often fosters new directions and opportunities. The energy storage industry is emerging as a new engine for the global energy revolution and China's efforts to build a new power system and achieve carbon peaking and carbon neutrality goals. Also, 2023 must be a year of unprecedented growth for the global energy storage industry. Energy storage enterprises should capitalize on this pivotal moment and accelerate innovative advancements within the sector.
Liu Weizeng, Chairman of JD Energy, emphasized that distributed energy storage presents a vast and enduring development track. JD Energy is committed to collaborating with all industry peers to unlock the potential of commercial and industrial energy storage in China, aiming to pave the way for prosperity for our partners. In this transformative period of human energy development, JD Energy stands ready to partner with everyone on the Starry Sky Plan ecological platform. Together, we will navigate challenges, forge ahead, and strive for mutually beneficial outcomes.
During the keynote speech session, Dr. Ma Fuyuan, Chief Scientist at the Zhejiang Energy Technical Research Institute, highlighted the economic challenges new energy and energy storage face regarding "economic accounting." Establishing a pricing mechanism where beneficiaries bear the cost is crucial. Additionally, tracking the carbon footprint of batteries, energy storage materials, and various materials in carbon asset management is essential for forming a robust system.
Wu Peilin, a researcher focuses on electrical equipment and the new energy industry at TF Securities, noted in her speech that based on calculations, the payback periods for user-side energy storage in various provinces are favorable: 4.75 years in Zhejiang, 5.70 years in Guangdong, and 5.98 years in Hainan, all falling within a six-year timeframe. Therefore, investing in commercial and industrial energy storage offers substantial economic returns for users. Looking ahead, the trend of widening peak-to-valley price differences will persist, further bolstering the economic viability of commercial and industrial energy storage and stimulating a surge in installation demand.
Chen Yuwei, a postdoctoral researcher at the New Energy Engineering Institute of the Huadong Engineering Co., Ltd. delivered a keynote speech on the energy storage industry's technological development pathways and case studies. She cited a practical example user-side storage returns from an operating project in Guangdong featuring installed capacities of 1,032 kWh and 2,046 kWh. The project comprises 12 eBlock-172P and 2 eLink-6 units. From December 1 to 30, 2022, it was operated in sharp, peak, and off-peak periods, achieving a total discharge of 91,698 kWh and a charge of 101,538 kWh. The project completion rate was 87%, and the overall profit rate exceeded 87%.
Zhang Yi, Deputy General Manager of JD Energy and Director of Products and Solutions, introduced JD Energy's distributed energy storage solutions and product roadmap. JD Energy promotes All-in-One distributed modular products for user-side applications, integrating long-life battery cells and high-efficiency BMS in outdoor energy storage cabinets known as eBlock. These cabinets can be connected on the AC side in parallel for block-style expansion, enabling elastic scaling. This year, the primary focus is promoting the eBlock-200 product for commercial and industrial users. With two charges and two discharges per day, it achieves a conversion efficiency of over 90%. The 380V system can be directly connected to the user's park network, making it the optimal choice for user-side energy storage.
At the launch ceremony of the JD Energy Ecological Partnership Program, a stellar lineup of industry leaders and guests, including Liu Weizeng, Chairman of JD Energy; Zeng Shaojun, Secretary General of the All-China Federation of Industry and Commerce New Energy Chamber of Commerce; Zhou Yuan, Vice President and Secretary General of the PGO Green Energy Ecological Cooperation Organization; Xiao Can, Chairman of Tianwei Energy; Lou Lizheng, Chairman of Beikong Intelligent Cloud Technology Co., Ltd.; Li Baoxin, General Manager of Liying Green Energy; Zhu Junpeng, President of the Jiangsu Energy Storage Association; Feng Zhuowen; Li Yefeng, Chairman of Zhejiang Sun Most New Energy Technology Co., Ltd.; Chen Dongqing, Chairman of Wenzhou Baisheng New Energy Technology Co., Ltd.; Chen Minfeng, General Manager of Zhejiang Jiangkun New Energy Technology Co., Ltd., and many esteemed others, came together to initiate and witness this pivotal moment jointly.
After the ceremony, Ma Jinpeng, Deputy General Manager of JD Energy, elaborated on the company's ecological partner policy. He revealed that for Zhejiang's user-side energy storage market, excluding civil engineering and construction costs, the previous market average price for energy storage systems hovered around RMB 1.65 yuan, translating into a system investment of approximately RMB 1.9 yuan. Based on the pricing calculation on two valleys and two peaks periods, with corresponding charges and discharges, the overall project yield stands at an impressive 18.03%, with a static payback period for the entire investment at approximately 4.75 years. If the market average price were to drop to RMB 1.39 yuan, the project's internal financial rate of return would jump to 21.75%, reducing the static payback period to 4.31 years and showcasing substantial potential value.
Notably, 40 companies in this conference ascended the stage to sign agreements with JD Energy, marking them as the first batch of JD Energy ecological partners. The signing ceremony was enveloped in a warm atmosphere of applause and excitement.
Furthermore, Zhu Yimin, Chairman of Yiwu JD Energy Technology Co., Ltd., a major ecological partner of JD Energy, shared practical case studies and project returns with the attendees. He stated that in April 2022, Yiwu JD Energy invested over RMB 1.2 million yuan to establish the first distributed energy storage station in Zhejiang Province, featuring an installed capacity of 344 kW/688 kWh. The project employed a distributed energy block solution comprising 4 eBlock-172 smart energy cabinets, one combiner box, and one fire protection cabinet. Roughly 10 months post-commissioning, the project is currently generating peak shaving and valley filling revenue of RMB 330,000 yuan, with expectations of recovering the investment within three and a half years, fully aligning with investment return projections.
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In the final roundtable discussion, hosted by Cao Yu, founder of Solarbe Consulting, an animated and profound exchange took place among esteemed guests, including Zhu Junpeng, President of the Jiangsu Energy Storage Association; Feng Zhuowen, Chief Engineer of China Energy Engineering Group Hunan Electric Power Design Institute Co., Ltd.; Lu Yuhua, Deputy General Manager of Huaxia Financial Leasing Co., Ltd.; Lou Lizheng, Chairman of Beikong Intelligent Cloud Technology Co., Ltd.; He Wei, General Manager of Zhejiang Star-Grid Energy Technology Co., Ltd.; and representatives such as investor Hillhouse Capital. The discussion focused on the opportunities and challenges inherent in the user-side energy storage sector. During the discussion, the guests expressed their collective aspiration to transform all stakeholders' wisdom, technology, and capital into tangible end-user benefits. They emphasized that the energy storage industry can only achieve long-term, healthy, and sustainable growth by creating products that serve the broader public interest. They also looked forward to improving technological advancements, cost reductions, business model innovations, and establishing robust standards and systems to construct an integrated four-in-one system, heralding an auspicious future for the energy storage industry.
