Hand-in-hand with the world’s move into an era of energy transition, the Chinese mainland introduced its 14th Five-Year Plan for Renewable Energy Development (the “Plan”) in June 2022. The Plan provides guidance to help the Country achieve its carbon peak and carbon neutrality goals, seeking to vigorously advance the development and use of renewable energy for power generation based on around a 20% share of non-fossil energy consumption by 2025. It also proposes that during the Plan period, renewable energy will contribute more than 50% of the incremental consumption of primary energy. The increase in renewable energy generation is expected to account for more than 50% of the total incremental power consumption, with a doubling in the generation of wind and solar power. With these national policies so strongly supporting the development of renewable energy, the prospects of the industry are highly promising.
In line with these policies and despite the recurrence of the COVID-19 epidemic in 2022, the Chinese mainland saw strong year-on-year growth in the newly installed capacity of photovoltaic power. As such, distributed photovoltaics, energy storage, hydrogen energy and smart energy faced some unique historical opportunities during this time.
Towngas Smart Energy established the Towngas Energy brand in 2016, to provide energy planning, energy conservation consultancy and other one-stop services for the Group’s city gas project companies. Building on these strong foundations and riding this positive wave, we have been making significant investments in zero-carbon smart industrial park scenario-based smart energy projects since we officially changed our name to Towngas Smart Energy. Moving forward, we will continue to focus on our three major strategic areas – integration, decarbonisation and digitalisation, as we advance the development of zero-carbon smart industrial parks, photovoltaics, energy storage, as well as charging and swapping station projects.
Currently, the Chinese mainland is still undergoing a gradual transition from fossil fuels to renewable energy. Efficient and clean natural gas will thus continue to play a vital role. The industrial sector, as a key area for energy conservation and carbon reduction, will see the expansion, improvement and application of efficient energy, while at the same time pursuing integrated developments with new energy. At Towngas Smart Energy, we will thus focus on facilitating the development of eight major emission control industries on the Chinese mainland. These include power, steel, nonferrous metals, petrochemicals, building materials, chemicals, paper-making and aviation. Our services will consist of energy conservation and emission reduction solutions, the installation of distributed photovoltaics, as well as every support to help companies to improve their energy efficiency. These services will not only facilitate the transition and upgrading of these industries in the long term, but also help the country to achieve its carbon peak and carbon neutrality goals.
In 2022, there were over 25,000 different industrial parks in the country. Approximately 2,600 were national and provincial level parks, generating approximately 31% of the country’s total carbon dioxide emissions. This reflects that there exists huge potential for industrial parks to achieve sustainable development and zero carbon emissions.
By the end of 2022, we had planned and invested in more than 500 renewable energy projects in 22 provinces, autonomous regions, and municipalities. We also signed contracts in the development of 80 zero-carbon smart industrial parks, with our business scope spanning multi-energy supply (cooling, heating, electricity), photovoltaics, energy storage, charging and swapping stations, as well as integrated energy services for industrial and commercial customers.
During the year, Towngas Smart Energy stepped up effort in communication and cooperation with a number of sizable enterprises, aiming to accelerate our business planning:
– We signed a strategic cooperation and development agreement with Tai’an Taishan City Construction Group in July 2022. Both parties will cooperate closely in the areas of gas supply, distributed energy heating, abandoned mine management, urban and rural water supply, sewage treatment, environmental management improvement, hydrogen energy application and zero-carbon demonstration city construction to assist Tai’an in its low-carbon development.
– Shenzhen Fuxin Dual Carbon Industry Operation Management Company Limited (a wholly-owned subsidiary of Futian Investment Holdings) and Ruihua (Shenzhen) Integrated Smart Energy Company Limited (co-established by China Power International Development Limited and The Hong Kong and China Gas Company Limited) announced in August 2022 that they would be working together to jointly develop an energy conservation, carbon reduction and transformative energy management contract project for public buildings in Futian. The Futian District Party Committee Compound has been designated a pilot site in this “nearzero carbon” emission project. The project is taking the lead to establish the first nearzero carbon flexible virtual power plant on the Chinese mainland.
Towngas Energy Investment Limited (“Towngas Energy”) and FuturaSun Energy (Jiangsu) Company Limited jointly hosted TERA TOUR to the Chinese mainland 2022 – Suzhou in November 2022 under the theme “Pooling Collective Wisdom of Zero-Carbon Technology”. The initiative not only brought representatives from authorities of Suzhou’s industrial parks, industry associations, renowned investment institutions, key strategic partners and customers together to explore an integrated smart energy application based on digital transformation and source-grid-load-storage integration. It also explored innovative ways to empower Suzhou’s green economic development into the future. Looking forward, TERA TOUR to the Chinese mainland will be held in other cities to further promote collaboration across the industry.
In addition to expanding our business footprint, we also make every effort to improve the quality of products and services provided in these zerocarbon smart industrial parks. In response to the uncertainties in the substance, requirements and assessment, both in scope and methodology, of industrial parks on the Chinese mainland, three basic zero-carbon technical standards for enterprises, the Zero-carbon Smart Industrial Park Indicator System and Standards, Zero-carbon Smart Industrial Park Carbon Emission Statistics Standards and Zero Carbon Smart Industrial Park Assessment and Acceptance Standards, have been introduced to ensure the consistent and sustainable quality of our products and services. These standards, the first implementable and monitorable corporate assessment specifications for energy use and emissions in zero-carbon smart industrial parks on the Chinese mainland, were jointly compiled by Towngas Energy (the lead organiser) with TÜV SÜD and Tsinghua University Energy Internet Innovation Research Institute.
The Implementation Guidelines for Energy Conservation and Carbon Reduction Transformation and Upgrading in Key Areas of High Energy Consumption Industries published by the Chinese mainland in 2022, points out the need to guide the transformation and upgrading, strengthen technical research, promote mass development and accelerate the elimination of obsolete equipment and practices. Since we have committed to developing our zero-carbon business with a strong focus on technology empowerment from the outset, we have dedicated many resources to technology research and innovation implementation and have progressed rapidly in this area over the years.
The First 10-billion Zero-carbon Technology Fund on the Chinese Mainland
In January 2022, the Group, together with our parent company HKCG, joined IDG Capital to announce the launch of the Country’s first Zero-carbon Technology Investment Fund. With a scale of RMB 10 billion, the first phase of fund raising initially consisted RMB 5 billion, focusing on investments in solar energy, wind energy, powered battery, energy storage, smart energy grid, hydrogen energy, carbon trading and management, as well as other zero-carbon technology-related areas of innovation. This zero-carbon fund is the first zero-carbon technology fund on the Chinese mainland to focus on technology investment and business applications. Together with IDG Capital, we will reach a comprehensive strategic partnership in zero-carbon technology, leveraging our diversified business scenarios to empower the implementation of innovative technology products, which will achieve energy conservation and emission reduction for industrial and commercial customers.
Joint Research Centre for Zero-carbon Smart Park and Virtual Power Plant Technologies
In April 2022, we cooperated with Tsinghua University to set up a Joint Research Centre for Zero-carbon Smart Park and Virtual Power Plant Technologies, seeking to overcome technology holdups as well as to drive the development and technological progress of energy Internet and new power systems. As a vital part of the new power supply system for zero-carbon smart industrial parks, virtual power plants will be able to balance the supply and demand of power, safeguard the supply of energy and ensure the stable development of the energy industry, while also improving the efficiency and achieving better utilisation of clean energy.
Towngas Smart Energy Ecological Platform
Also in April 2022, the Towngas Smart Energy Ecological Platform, jointly developed by Towngas Energy and Tencent Cloud, was officially launched and implemented in Hailing District, Taizhou City, Jiangsu Province. As one of the top 100 industrial zones on the Chinese mainland, Hailing District focuses on the new energy industry. Apart from the construction and application of rooftop distributed photovoltaics, it combines charging and swapping, industrial and commercial energy conservation, user-side energy storage, district energy stations, gas distributed energy stations, smart power distribution networks and virtual power plants. Once fully completed, the project is expected to reduce carbon emissions by hundreds of thousands of tonnes per year. The park uses the Towngas Smart Energy Ecological Platform to collect the measurement and operation data of various projects through the IoT system, achieving visualbased data for the analysis, forecast, enhancement and smart management of the energy data of the industrial park.
Towngas Energy Academy
The Group established the Towngas Energy Academy in July 2022. The Academy’s aim is to attract and lead scientific research in partnership with other scientific institutions to transform breakthroughs in scientific research into achievable commercial projects by offering a practical commercial environment with a focus on smart and green energy. As a research institute established on the Chinese mainland and in line with our development strategies, Towngas Energy Academy will act as the Group’s unified platform for external exchange with the world of technology and research institute, academia and industry. It will also carry out applied research and strategic layouts in the fields of hydrogen energy, energy storage, energy digitalisation, renewable energy, energy conservation and low-carbon innovations. The Academy is located in the Hong Kong-Shenzhen Innovation and Technology Park in the Lok Ma Chau Loop, which leverages our geographical advantages and allows us to benefit from the opportunities offered by the Guangdong-Hong Kong-Macao Greater Bay Area as well as the many collaborations among the government, industry, academic and research sectors.