Huang Xiaoshan
What comes to your mind when Inner Mongolia is mentioned? Maybe it is the boundless prairie with blue skies and white clouds floating along with livestock.
How about Ordos? Riches, cashmere sweaters, ghost towns, or abundant coal…
We often have a fixed impression of a certain place, but when you actually set foot on that land, you may have a brand-new understanding of it.
On October 12th, I was invited to participate in Far East Horizon’s Zero-Carbon Summit and visited Ordos for the first time. It really refreshed my impression of the city.
The whole city is incredibly clean, and the vegetation is lush, which completely overturned the dirty and polluted woes in my mind.
A greater change was brought about after participating in the Zero-Carbon Summit with a more in-depth understanding of the local resource conditions, economic development, and low-carbon transformation.
I came to know Far East Horizon because it acquired an 80% stake in the Japanese AESC in 2018, thus officially entering the power battery field. AESC is a battery enterprise jointly funded by Nissan and NEC in 2007, and its batteries exclusively supply the Nissan Leaf, which has sold 600,000 vehicles globally.
“Far East Horizon Power” was established after the acquisition. According to SNE Research, a Korean market research institution, the company ranked ninth in global power battery installation from January to August this year.
The company began by focusing on renewable energy power generation before expanding into the energy internet of things and then the power battery sector. From power generation to consumption, Far East Horizon is turning into a zero-carbon partner for global enterprises, governments, and institutions.
This zero-carbon practice was launched by Far East Horizon in Ordos.
What Does Far East Horizon Do?
Far East Horizon was founded in 2007 focused on wind power technology. As of this year, it has more than 12,500 smart wind turbines connected to the grid, and according to BNEF statistics, Far East Horizon Energy ranked fourth in the global wind turbine market in 2020.
According to international research firm Wood Mackenzie, Far East Horizon Energy won the most wind power bids in China in the first half of 2021, ranking first in the country. It can be said that Far East Horizon has taken advantage of the booming wind power market in the past decade by exploring a global layout with one hand and diversifying its business with a focus on new energy with the other.
Currently, Far East Horizon has three core business sectors:# Vision Energy: Intelligent Wind Power and Smart Energy Storage System.
Vision Power: Power Battery Business.
Vision Intelligence: Intelligent Internet of Things Operating System and Solutions for Renewable Energy, Carbon Neutrality and Urban Infrastructure Scenarios.
It can be seen that Vision has been building a technology ecosystem centered on new energy power from wind power to batteries to zero carbon. And this coincides with the needs of energy and automotive industry transformation: China and even the whole world are currently undergoing a structural transformation of new energy, and the development of new energy vehicles cannot do without a new type of power system based on new energy as the main support to realize comprehensive carbon neutrality in product itself, energy supply, material supply, production and manufacturing, and transportation.
The new energy vehicle industry also faces the challenge of zero carbon transformation: people often complain that the electricity used by new energy vehicles is from thermal power, which is not environmentally friendly enough. Especially, the carbon emissions caused by materials and component production in the automotive manufacturing stage have attracted much attention. Among them, the energy consumption of power batteries accounts for a large proportion. According to research institutions, the carbon emissions from battery production can be as high as 106 kg CO₂ e/kWh.
As an intermediate link in the automotive industry, Vision not only provides zero-carbon solutions for partners, but also puts forward its own carbon neutrality transformation requirements: under the national goals of carbon peak by 2030 and carbon neutrality by 2060, Vision proposes its own carbon emission reduction targets, promising to achieve global business operation carbon neutrality by the end of 2022 and supply chain carbon neutrality by the end of 2028.
So what kind of company is Vision in the end?
According to CEO Zhang Lei, “Vision is an energy company, an intelligent Internet of Things technology company, and will become a future zero-carbon lifestyle company. We hope that through creative technology and design, we can turn technology into products that make people’s lives better.”
What is Vision going to do in Ordos?
At the Zero-Carbon Summit in Ordos, Vision released the culmination of its core business – the world’s first zero-carbon industrial park. This is centered on Vision Power’s 20GWh battery production and manufacturing base, integrating upstream and downstream industrial chains such as renewable energy, power batteries and energy storage, electric heavy trucks, battery materials, and green hydrogen, and combining wind power, photovoltaics, energy storage, carbon management, and power trading to achieve a zero-carbon closed loop for the entire park.
This park not only covers Vision’s core business and products, but also integrates Vision’s zero-carbon concept.
Vision believes that Ordos has the potential to become the new “Manchester” of the green new industrial revolution. Why?## Inner Mongolia Ordos: A Treasure Trove of Resources
As a typical resource-based city in China, Inner Mongolia Ordos boasts abundant energy, chemical, and building material resources, earning the reputation of being a “treasure trove beyond the Great Wall.” Ordos has confirmed coal reserves of 210.2 billion tons, accounting for approximately one-sixth of the national total, and nearly 5 trillion cubic meters of natural gas reserves, accounting for one-third of the country’s total and serving as one of the major sources of natural gas for the national “West-East Gas Pipeline” project. However, it has also been dubbed the largest province for carbon emissions in China, with an annual carbon output of approximately 700 million tons, of which Ordos accounts for one-third.
To transition from traditional high-energy consumption and high carbon emissions to a low-carbon and sustainable development approach is an inevitable choice for cities like Ordos. With abundant renewable energy such as wind power and solar energy, this transition is feasible.
While the beginning is always difficult, meeting economic development needs is the primary concern. Therefore, it is not only essential to have a foundation for green energy production but also to have a sustainable emerging industry, allowing a city to make a determined effort to pursue this transition.
The Zero Carbon Industrial Park, as an entry point, integrates green energy, transportation, and chemical industry to create a new paradigm for zero-carbon.
Emphasis on Power and Energy Storage
Given that it is already in the business of “power generation,” energy storage is essential. Now with an extension into “power consumption,” batteries are even more indispensable. It was almost natural for Farasis Energy to tap into the battery industry.
At present, Farasis Energy has established three factories in Japan, the United Kingdom, and the United States, with a total battery production capacity of 7.5 GWh, mainly producing power batteries for vehicles.
Subsequently, Farasis Energy established the first domestic battery factory in Wuxi, with a planned capacity of 20 GWh. According to Yang Xiaowei, Vice President of Sales in the China region at Farasis Energy, the first phase of the Wuxi plant, with a capacity of 5 GWh, has been completed, with an emphasis on Three Elements Power Battery and energy storage batteries.
As mentioned above, Ordos has a battery production capacity of 20 GWh mainly producing power batteries and phosphoric acid iron lithium energy storage batteries utilized in commercial vehicles.
According to Farasis Energy’s latest battery production capacity plan, multiple overseas new factory projects have been launched, with locations in Dole, France, Sunderland, UK, and Ibaraki Prefecture, Japan.
The Dole factory in France is scheduled to achieve an annual production capacity of 24 GWh by 2030, with the potential for expansion to 40 GWh;
The Sunderland factory in the UK is scheduled to achieve an annual production capacity of 25 GWh by 2030, with the potential for expansion to 35 GWh;
Ibaraki Prefecture factory in Japan is expected to have a planned capacity of 18 GWh. After complete production, it can provide a new generation of power battery products for 300,000 electric vehicles. The first-stage factory will begin mass production by 2024.The planned battery production capacity of JinkoPower is expected to reach 114.5 GWh, with an additional expansion potential of 31 GWh. This is not only to supplement its own supply capacity in energy storage, but also to tap into the new energy vehicle market in line with its business needs and global layout. Its “Energy and Transportation” businesses are interrelated and complement each other, with materials recycling utilized after the batteries have reached the end of their lifespan to achieve full life-cycle closure for power batteries and energy storage.
In terms of energy storage, JinkoPower has won multiple bids: in September, it won the bid for the world’s largest source-grid-load demonstration project in the Three Gorges Ulanqab new-generation electric grid-friendly green power station demonstration project, providing a 70 MW/140 MWh smart energy storage system for its first phase. In October, it won the bid for two wind power projects of China Resources Power, providing a 64 MW intelligent land-based wind turbine and a 6.4 MW/12.8 MWh smart energy storage system.
Focusing on high-end passenger and commercial vehicles
JinkoPower’s strategy, vision, and layout are in place, but any “JinkoPower” plan will ultimately have to be implemented in order to avoid being just pie in the sky.
Specifically in terms of power battery business, Yang Xiaowei, CEO of JinkoPower, said that the company is currently focusing on two business lines for overseas and domestic high-end passenger and commercial vehicles.
Why high-end passenger vehicles? Yang Xiaowei explained that “JinkoPower’s battery for the Nissan Leaf model has been upgraded to the fourth generation product, with a cumulative supply of over 600,000 units and still maintaining zero major safety accidents. This is not easy for ternary batteries, and behind it is more than a decade of experience accumulation and strict requirements for research and development, production, and technology. High-quality ternary batteries have higher energy density and longer endurance, but the relative cost is also higher, so high-end manufacturers tend to choose this type of product.”
In July of this year, French carmaker Renault signed a cooperation agreement with JinkoPower for a 5-year, 40-120 GWh power battery order.
At the same time, JinkoPower will continue to provide Nissan with the next generation of power battery systems.
In the commercial vehicle sector, JinkoPower has just signed a cooperation agreement with FAW Jiefang to provide it with power batteries. At the same time, FAW Jiefang is also setting up a new energy commercial vehicle production base in Ordos, and the two parties are jointly engaged in the pilot operation of battery-swapping heavy trucks.
To this end, JinkoPower has also established a joint venture with local companies in Ordos, called JinkoPower Saints Circle Technology Co., Ltd., which is mainly responsible for the construction and operation of the heavy truck battery-swapping station. The first battery-swapping station has already been put into use.
Currently, the coal production and sales volume in Ordos is stable at around 660 million tons, corresponding to 330,000 diesel heavy trucks.As a big city in the energy industry, Ordos is also a city with high energy consumption, with great pressure to reduce emissions. At the same time, the solar and wind energy resources available for development in Ordos are all in the tens of millions of kilowatts, thanks to its renewable energy resource advantages, the special scenario of local large-scale short-haul heavy trucks, and the visionary technologies and energy system integration capabilities in the green energy, smart grid, and power battery fields. By utilizing low-cost renewable energy electricity, Farasis Energy, with the ability of integrating renewable planetary power and energy efficiency, can reduce operating costs and achieve clean energy usage in heavy trucks through the green power operation of battery swapping stations.
Moreover, battery swapping stations can participate in renewable energy electricity systems through the smart IoT and energy storage. Additionally, through cascade utilization and wind-light complementary energy storage, retired power batteries will realize the full life-cycle value.
It’s worth noting that Ordos is guaranteed with 20GWh of battery production capacity, mainly producing lithium iron phosphate batteries. While half of the production capacity is for vehicles that are not sensitive in terms of low range or cost, such as battery-swapped heavy trucks, the other half is for energy storage.
If 330,000 diesel trucks in Ordos are replaced with electric vehicles, 30 million tons of greenhouse gas emissions and CNY 30 billion of operating costs can be reduced each year. Therefore, starting from this, Farasis Energy is guiding the widespread application of new energy commercial vehicles in transportation, sanitation, urban garbage, logistics, and public transportation in Ordos, building a demonstration operation base for new energy commercial vehicles.
Looking at the battery swapping station from another angle, it is actually an energy storage station. With the large-scale application of energy storage, the limitations of AESC’s only car-mounted power batteries have been compensated for. After being acquired by Farasis Energy, the station ushered in new opportunities for innovation.
It can be seen that in the new round of global energy transformation, especially in the context of China’s dual-carbon goals, Farasis Energy is transforming itself from a wind power technology company to a zero-carbon solution provider.
Its ambition is to promote wind power and photovoltaics as the “new coal”, batteries and hydrogen as the “new oil”, and intelligent IoT as the “new grid”.
This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.