I found information on the Guangdong Provincial Investment Project Online Approval and Supervision Platform indicating that on September 10th, the world's largest independent energy storage station obtained registration.
The detailed registration information reveals that the project is officially known as the "Suoyingxin Energy Zhongkai High-tech Zone 1GW/4GWh Electrochemical Independent Energy Storage Station" (referred to as the "Suoying Zhongkai Project"). It is located in the Tianxindan of Chenjiang Street, Zhongkai District, Huizhou City, with a total investment of 5 billion Chinese yuan.
This project has stunned the industry and attracted significant attention from various quarters. Such a substantial investment project raises questions about the source of the funding and who the primary beneficiaries are.
01
Global Record Holder
As of the data available, the 4GWh capacity of the Suoying Zhongkai project surpasses all other independent energy storage projects globally, doubling the scale of the world's largest under-construction independent energy storage project. In July 2023, the world's largest independent energy storage project had just received planning permission. This project is under the ownership of the British independent energy development company Carlton Power, located in the Trafford Low Carbon Energy Park in Manchester, with a scale of 1040MW/2080MWh and a total investment of approximately 7.5 billion pounds (about 67.6 billion Chinese yuan). It is expected to begin construction in the first quarter of the next year and be operational by the fourth quarter of 2025.
The largest operational single energy storage project globally is "Crimson," which broke ground in 2021 and connected to the grid for power generation in October 2022. This project is located in the California desert, with a capacity of 350MW/1400MWh. Atlas provided a one-stop solution and long-term operational services for the Crimson station. In September 2021, Atlas's fully-owned subsidiary, Recurrent Energy, sold 80% of the project's equity to investment management company Axium, with both entities jointly owning the project.
In China, the largest electrochemical energy storage station in operation is located in Shache County, Xinjiang, and it successfully connected to the grid on July 13th.
CRRC (China Railway Rolling Stock Corporation) provided the complete energy storage system integration equipment for this station. The project is an integrated photovoltaic and energy storage project invested and built by Shaanxi Xinhua Water Resources and Hydropower Investment Co., Ltd. It has an associated energy storage capacity of 200MW/800MWh, with a storage ratio of 25%. The total investment is approximately 5 billion Chinese yuan, covering an area of 2.7 million mu.
According to information, the energy storage system provided by CRRC consists of 77 2.6MW/10.4366MWh (9.691MWh) lithium iron phosphate battery storage subunits, including 77 converter booster compartments and 154 energy storage battery compartments.
If calculated based on CRRC's 2.6MW/10.4366MWh individual storage capacity, the Suoying Zhongkai project would require 384 energy storage cabinets.
Specifically, the Suoying Zhongkai project occupies an area of 133,200 square meters with a building area of 25,000 square meters (for constructing the booster station). Its primary activities include purchasing energy storage equipment, installing energy storage systems, and engaging in power exchange. The annual output value is approximately 570 million Chinese yuan, with annual tax payments of around 110 million Chinese yuan (calculated based on a 16-year energy storage usage period, this tax payment represents the annual average tax value, and the energy storage station's payback period is less than this amount). Based on these calculations, the project occupies an area of about 200 mu.
△ Project registration information. Screenshot from the Guangdong Provincial Investment Project Online Approval and Supervision Platform
The construction entity is Guangdong Suoyingxin Energy Technology Co., Ltd., and the registration authority is the Economic Development and Statistics Bureau of the Zhongkai High-tech Industrial Development Zone Management Committee in Huizhou. The project's start and end dates are from December 1, 2023, to July 1, 2024, with a construction period of approximately 7 months.
02
Suoying "Swallowing the Elephant"?
This project has only revealed its outline and form, leaving the operators and the source of funding shrouded in mystery.
A look into the ownership structure reveals that Suoying Electric is the mastermind behind this project.
The project contractor is Guangdong Suoyingxin Energy Technology Co., Ltd., established in January 2023, with a registered capital of 10 million Chinese yuan, located on Wenchang Road in Jiangbei, Huizhou City.
Its major shareholder is Beijing Suoying Microgrid Technology Co., Ltd., holding 49%, and Suoying Microgrid is 100% owned by Beijing Suoying Electric Technology Co., Ltd.
In February 2023, Suoying Electric officially submitted for IPO guidance, with China International Capital Corporation (CICC) acting as the guiding institution.
Securing a mega-project before going public could potentially enhance Suoying Electric's chances of a successful IPO.
According to their official website, Suoying Electric was founded in February 2002, and its founder, Wang Shicheng, is a 1989 graduate of Tsinghua University's Department of Electrical Engineering. In 2009, the company ventured into the PCS (Power Conversion System) field, focusing on large-scale energy storage PCS electrical systems and high-end battery testing. It has received recognition as a national-level "Little Giant" enterprise in specialized and innovative areas.
The company's main products include energy storage bidirectional inverters (PCS), integrated energy storage electrical cabinets, energy management systems (EMS), integrated energy storage and charging testing systems, and battery testing systems.
In terms of performance, Suoying Electric ranks at the forefront of the PCS industry. It has delivered over 100 energy storage demonstration projects, with a cumulative energy storage capacity of over 3GW, consistently ranking in the top three for national industry shipments for three consecutive years.
The company's major customers include Inner Mongolia Power Group, Southern Power Grid, Zhejiang Business Zhongtuo Xieneng, Qingdao Lifepo4 New Energy, China National Offshore Power, Xugong Group, Shandong Electric Power, Pingao Group, and Chinergy Innovation Navigation, among others.
In the 2023 Energy Storage Industry TOP 50 list by High Tech Industry Institute, Suoying Electric is ranked 26th.
In the PCS category rankings by the Zhongguancun Energy Storage Alliance, Suoying Electric was third on the list of the top domestic energy storage PCS shipments for 2022 and eighth in global energy storage PCS shipments for Chinese companies in 2022.
However, even for a company at the forefront of the industry, securing funding for a project of this scale is a significant challenge. According to incomplete data, Suoying Electric's total winning bids amount to approximately 580 million Chinese yuan. Financing the project with their own funds is evidently less feasible.
So, what is Suoying Electric's financial status? Up to this point, Suoying Electric has undergone at least three rounds of financing, including:
Strategic financing in July 2013, with investors including the Zhongguancun Development Group.
In September 2021, they attracted investors such as Yongfu Shareholding, Caitong Innovation, Haiguo Rongzhi Investment, and Zhaoyin International.
In July 2022, they completed equity financing with investors including Yongfu Shareholding, Meijin Energy, Linyang Energy, Sanxing Capital, Dingxiang Capital, State Power Investment Corporation, and Shengjing Jiacheng Fund.
According to Linyang Energy's financial reports, their investment in this round of financing amounted to 55 million Chinese yuan, representing a 2.75% stake. If we extrapolate this to a 10% share release, the financing amount would reach 200 million Chinese yuan, and Suoying Electric's valuation would reach 2 billion Chinese yuan.
Interestingly, on July 3, 2023, Suoying Electric once again increased its registered capital from 42.737633 million Chinese yuan to 44.696441 million Chinese yuan, seemingly completing another round of financing. This additional funding may strengthen Suoying Electric's financial backing.
It's not surprising that this project landed in Huizhou, Guangdong. Guangdong is wholeheartedly promoting the development of new energy storage and has set a trillion-yuan target with favorable policies. Huizhou also has a robust foundation in the new energy industry, with over 800 related companies, including leading battery manufacturers like Eve Energy, BYD, and Xinyangda.
However, looking to the future, once this unprecedented gigawatt-scale mega-energy storage station is completed, safety concerns will remain a Damocles' sword hanging over Suoying Electric. Under the demand for long-duration storage of 4 hours, the battery system will face extreme challenges regarding balance, thermal management, and temperature control.
If this project is likened to the high-difficulty game of "fitting an elephant into a refrigerator," Suoying Electric has only taken the first step in opening the refrigerator door.
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