From being the "ender" of China's power distribution "knife switch" era back then, to becoming today's "energy efficiency management expert," under the impetus of the low-carbon trend, Schneider Electric has already directly set its sights on the highly sought-after smart grid market in China. In the pursuit of the smart grid:
In May 2010, Schneider Electric moved its Asia-Pacific headquarters to Beijing. In 2009, it appointed Zhu Hai as its first local president in history. Looking at it now, this decision was made too late; if there was a chance to do it again, they would have moved their business center to China even earlier.
Schneider Electric is not the only one shifting resources towards the Chinese market. As early as 2006, ABB moved its global robotics business headquarters from Detroit to Shanghai.
Both ABB and Schneider Electric are eyeing the upcoming comprehensive construction of China's smart grid. The intelligent upgrade and transformation of China's traditional power grid will drive the rise of a trillion-yuan-level industry. Moreover, central state-owned enterprises like State Grid Corporation are also attempting to build smart grids. Clearly, as a global energy efficiency management expert, Schneider Electric is focusing on this as a strategic priority, accelerating its layout for the smart grid in China.
On May 21, 2009, State Grid Corporation announced its smart grid development plan for the first time, deciding to focus mainly on six key areas: power generation, transmission, transformation, distribution, consumption, dispatching, and communication information platforms, covering all fields of the traditional power system. With the gradual clarity of China's smart grid development roadmap, the construction of the smart grid will give birth to a massive industrial "cake." Among the many industries involved, just the opportunities in grid technology alone may exceed a trillion yuan. The Chinese government publicly committed at the end of 2009 to reduce carbon emissions per unit of GDP by 40% to 45% by 2020. This goal triggered strict power cuts and restrictions last year during the closing phase of the "Eleventh Five-Year Plan." This shows the unwavering determination of China's decision-making level toward this target. In the newly started "Twelfth Five-Year Plan," the smart grid will enter the full construction phase, with an expected investment of 4 trillion yuan by 2020. However, in the Chinese market, Schneider must not only face competition from other multinational companies but also challenges from Chinese enterprises that possess cost and resource advantages.
Regarding this tempting large cake, Yang Junqian, Chief Expert of Smart Grids, Electric Vehicles, and New Energy at Schneider Electric (China), openly expressed his intention to "grab a share": "The intelligent core of the smart grid lies in how to establish a strong distribution network. Schneider Electric will leverage its technical advantages and advanced experience in power distribution and energy efficiency management to become a valuable consultant and solution provider for China's smart grid construction."
In fact, two years ago, Schneider Electric had already established a global research department dedicated to analyzing and studying smart grids, and specifically set up the position of Chief Expert in Smart Grids, Electric Vehicles, and New Energy in China. Schneider Electric believes that future smart grids need to address the integration of distributed power generation, optimize energy management to ensure efficient grid utilization, and guarantee ubiquitous communication and intelligence. At present, China needs to strengthen its investment in distribution networks. The core of the smart grid is to establish a reliable, safe, efficient, and green environmental protection distribution network, but the energy consumption during China's current power transmission and distribution process remains quite high.
After re-evaluating its own advantages and existing industrial layouts, with its rich product lines and numerous solutions, Schneider Electric has focused its attention on power distribution and energy management.
"From Schneider's perspective, within the broad scope of smart grids, the first area where work can be done is new energy power generation, including wind and solar energy. The second area is the center, building a flexible, stable, and reliable smart distribution network to achieve distribution network automation. The third area is smart residences and smart homes. The fourth area is actually smart users, including large buildings, large data centers, and large factories, aiming to maximize their energy efficiency, reliability, and consistency in interaction with the grid. The fifth area of business is the rapid response and management of distribution networks and users. These five areas of business represent Schneider's direction and core in the smart grid field," explained Yang Junqian.
For many years, Schneider Electric's traditional strengths have been in power distribution and electricity use. In renewable energy power generation, smart distribution networks, smart residences, efficient enterprises, demand response, and electricity management, Schneider Electric holds leading advantages globally. In the renewable energy power generation sector, Schneider Electric provides comprehensive solutions in the solar power generation industry, including main DC cables, combiner boxes, inverters, monitoring systems, energy analysis, and grid-connected substations. "This will provide good reference for the construction of China's smart grid," said Yang Junqian.
At the Schneider Electric Solutions Summit concluded last year, Zhu Hai, President of Schneider Electric China, also mentioned that as an important participant and promoter in the energy-saving field, Schneider Electric can help customers achieve a 30% energy-saving target through innovative overall solutions.
Today, the complete set of solutions is precisely the "trump card" for Schneider Electric and other multinational companies to compete with local enterprises.
Gold Mining in Solar Energy
In reality, Schneider Electric entered the photovoltaic power generation market quite early. In August 2008, Schneider Electric acquired Xantrex, one of the top three manufacturers of solar and wind energy inverters globally. Through this acquisition, it gained the ability to offer a full system solution to solar power generation enterprises, ranging from main DC cables, combiner boxes, secondary flow cables, energy conversion transformers to monitoring systems, energy analysis systems, medium-voltage cables, and grid-connected substations. Its photovoltaic inverter has become a core part of Schneider Electric's renewable energy industry solutions and an important direction for its current and future development. In 2009, Schneider Electric particularly separated its photovoltaic business in China into an independent business department, providing comprehensive solutions excluding solar panels, including distribution systems, grid monitoring systems, and security systems, demonstrating its emphasis on this business and its rapid development.
"We have developed rapidly because we've ridden the wave of national support for the industry's growth, and we ourselves have worked hard and moved quickly," explained Wang Guowei, Director of Solutions Business for Schneider Electric's Distribution and Energy Division. "In recent years, we have put great effort into developing comprehensive solutions, and now Schneider Electric's teams around the world are very mature."
Schneider Electric began its photovoltaic applications in Europe. Currently, it operates this business in more than 100 countries. Last year, Schneider Electric achieved excellent results in the Italian, German, and French markets. "For us, entering the photovoltaic industry simply means adding a business line to our existing departments. Our existing sales channels, market influence, and after-sales service guarantees give us a significant advantage in market competition," said Wang Guowei.
With the significant reduction in photovoltaic power generation costs and the maturation of technology, Schneider Electric has established four solar system solution centers globally, located in Spain, France, Italy, and China, providing professional engineering design, project implementation, installation guidance, and operational consulting services to each country's solar industry.
"Our photovoltaic business is growing very fast, with rapid growth in both absolute product sales numbers and solutions growth," Wang Guowei introduced. As a global leading supplier of photovoltaic power generation system solutions, Schneider Electric's successful cases in the solar energy field have spread worldwide, with cumulative constructed solar projects exceeding 1,000 megawatts. These include the largest solar photovoltaic power station in Asia, the Huanneng Group Shilin 100MW PV grid-connected demonstration power station, Datang Qingtongxia 10MW PV power station, CGNPC Tibet high-altitude PV power station, as well as the Hopei 43MW PV power station in Italy and the Aquitaine 74MW PV power station in France.
Starting from 2008, Schneider Electric China ventured into China's photovoltaic power generation market. Currently, among the four domestic cooperative projects, two projects of 66MW and 100MW have been successfully completed. Especially in the cooperation project with China Guangdong Nuclear Power Group, 75% of the inverters selected were products from Schneider Electric. Therefore, Schneider Electric has great expectations for the booming development of China's photovoltaic market, investing substantial human and material resources to support the development of the Chinese market. This is also why Schneider Electric set its Asia-Pacific headquarters in Beijing.
Outstanding Performance in the Chinese Market
The importance of the Asia-Pacific market, especially the Chinese market, is crucial for Schneider Electric. Since establishing its first joint venture factory in 1987, over 23 years, with 22 factories, 6 logistics centers, and 2 R&D centers, the Chinese market has grown into Schneider Electric's second-largest market globally.
As expected, the Chinese market has given Schneider Electric new surprises. As an emerging industry, in recent years, the development of new energy sources such as wind power and solar energy has been rapid, and the successive introduction of new energy policies has created favorable external conditions for industrial development.
In November 2009, the digital computer monitoring system and ancillary equipment of the Huaneng Group Shilin 100MW PV power station in Yunnan, China, adopted Schneider Electric's products. This was Schneider Electric's first successful case in large-scale domestic PV power stations. The success of this project laid a good foundation for Schneider Electric's comprehensive cooperation with large Chinese power generation groups in the solar power generation industry.
In February 2010, Schneider Electric won the Dunhuang 10MW PV power station and Qinghai Xietieshan 10MW PV power station projects undertaken by CGNPC Solar Energy Development Co., Ltd., achieving the first planned large-scale solar PV power station at high altitudes domestically and internationally.
Currently, the Shilin, Dunhuang, and Xietieshan projects have all been successfully commissioned. The average annual power generation of the Shilin project alone is 11.8285 billion kWh. In May this year, two high-altitude projects in Tibet were also commissioned. Additionally, in Europe, including France, Italy, and the Czech Republic, Schneider Electric will also commission multiple PV projects, including EPC and operation maintenance projects.
Currently, the integrated complete solutions provided by Schneider Electric can serve the entire upstream and downstream new energy industry chain from equipment manufacturers, power plants, construction enterprises to end-users, and have successfully implemented electrical systems or EPC turnkey projects in photovoltaic power stations in multiple countries, with a cumulative installed capacity exceeding 800MW globally.
It is evident that in the photovoltaic industry, Schneider Electric has embarked on a new "gold mining" journey. Wang Guowei stated, "In the next phase of work, we will focus on key provinces such as the central-western regions and Shandong Province, setting up sales and service personnel accordingly, and continue promoting comprehensive solutions, introducing more plans. Meanwhile, we are collaborating with domestic and international panel manufacturers or investors to introduce photovoltaic power station businesses into China or take them abroad." For small customers who lack funds but want to use Schneider products, Schneider has specially introduced energy performance contracting and financial leasing mechanisms. Currently, using the energy performance contracting method, Schneider is constructing a 3MW solar power system for an airport in a provincial capital city. The initial construction investment is provided by Schneider Electric, and the customer only needs to purchase the required power output at the initially agreed price and term.
In fact, in this new round of improving economic development quality, for basic industries such as power and energy, it signifies a new round of growth opportunities and intensified competition. In the past few years, not only do we see new listed companies like Shaanxi Drum Blower (Group) Co., Ltd. with sales reaching over 3 billion yuan, but also state-owned enterprises like Shanghai Electric Group dominating their respective regions, trying to leverage their credit and channel advantages to seize market high points. Of course, this industry is not short of innovative enterprises, with many elites from new materials, automation, IT, and finance sectors choosing this as their entrepreneurial starting point.
Similarly, as a foreign company, ABB's slogan is: "Using power and efficiency to create a better world." Throughout the development of new energy, ABB can provide a full range of products, playing a unique technical role. Meanwhile, Schneider Electric faces the situation of expediting the operation of its photovoltaic solar projects while maintaining its market advantage in the wind energy field. Currently, Schneider Electric has established a professional base for wind turbine inverters domestically, aiming to comprehensively provide grid-connected wind turbine systems and enhance market competitiveness.
Yang Junqian believes that although China is currently in the early stages of the wind energy market, wind energy will be the most potential renewable clean energy in China in the coming years. It is expected that after 2020, wind power will surpass nuclear power to become China's third-largest power source. As a global energy efficiency management expert, Schneider Electric takes pride in having over 20 years of experience in providing solutions and services in the wind energy industry, helping customers maximize the use of wind energy. "Schneider Electric's outstanding advantage lies in its unique positioning and complete energy efficiency management business structure. We can fully utilize cross-departmental collaboration within the company to meet the market demand for comprehensive solutions and accelerate the company's progress in the solution and service domain," Yang Junqian confidently said.