Energy Insider: ‘EV Battery Capital’ Turns to Solar, Jiangsu Builds AI-Enabled Virtual Power Plant

[para. 1] This week’s Caixin energy wrap covers several key developments in China’s energy sector, focusing on policy shifts, industry updates, and international tensions. Topics include Yibin’s foray into solar manufacturing, Jiangsu's virtual power plant project, Longi Green Energy’s anticipated financial losses, and China’s response to the U.S. car tech ban.

[para. 1][para. 4] [para. 5] Yibin, traditionally known as China’s "Capital of Power Batteries," is pivoting to boost its solar manufacturing capabilities. The local battery sector has reached saturation, prompting this strategic shift towards photovoltaic (PV) industry development. Yibin anticipates the PV sector will become a significant economic player alongside power batteries, potentially reaching a valuation of 100 billion yuan within three to five years. Initiatives are in place to increase the sector’s output value from 30 billion yuan to 40 billion yuan annually. However, the city faces challenges such as a saturated market, price competition, and the impact of national electricity market reforms.

[para. 7][para. 8][para. 9] Jiangsu province is constructing a significant virtual power plant (VPP) to manage peak electricity demand efficiently. Utilizing artificial intelligence and big data, the VPP will incentivize residents to adjust energy usage during high-demand periods via an app, offering monetary rewards. This initiative reflects China’s innovative approaches to balance electricity supply and demand. The country's electricity consumption surged by 6.8% year-on-year in 2024, far exceeding U.S. levels. Besides VPPs, China is exploring reverse-charging systems enabling electric vehicles to feed excess power back to the grid.

[para. 11][para. 12] Chinese solar giant Longi Green Energy Technology Co. Ltd. has projected significant financial losses, estimated between 8.2 billion yuan and 8.8 billion yuan for 2024, largely due to increased competition within the industry. The ongoing price war and rapid technological advancements have led to falling prices and profits, as well as asset impairments from investments in silicon producers. This situation underscores a broader industry-wide challenge within China’s solar manufacturing sector. To address this, the central government has implemented stricter rules to control manufacturing expansion and enhance product quality.

[para. 15][para. 16][para. 17] Internationally, China is facing tensions resulting from the U.S. ban on Chinese technology in smart cars. The Chinese foreign ministry criticized the U.S. regulation as an act of "protectionism and economic coercion," arguing that the ban on intelligent connected vehicles and related technologies from China and Russia posed unnecessary trade barriers. This exchange comes amidst the inauguration of Donald Trump as the U.S. president, known for his hard-line stance on trade with China. China's new Energy Law highlights its readiness to take countermeasures against foreign restrictions targeting its renewable energy sector.

[para. 18] Overall, these developments highlight the dynamic nature of China’s energy sector, driven by both domestic strategic shifts and international geopolitical tensions. As China continues to pursue its “dual carbon” goals, it faces both growth opportunities and significant challenges, including market saturation and international trade disputes.