Financial Services Association, January 4 (Reporter Zhao Zixiang) Entering 2024, there are also new cross-border operations for new energy sources. This time, they are “selling salt.” Tonight, Suyan Jingshen (603299.SH), which sells salt chemical products, announced that the company plans to establish a joint venture with two state-owned enterprises in the province to establish an “energy storage enterprise” to cooperate in the construction of compressed air energy storage projects.

A Financial Services Association reporter noticed that this is another new move in the construction of the “salt+energy storage” industry since Suyanjing Shenji and CNPC jointly formed the National Energy Company to advance the Zhangxing gas storage project.

According to Suyan Jingshen's announcement, the current partners are Jiangsu Guoxin Group Co., Ltd. (“Guoxin Group”) and Huai'an Industrial Investment Co., Ltd. (“Huai'an Industrial Investment”), which jointly invested to establish a joint venture as Jiangsu Guoxin Suyan (Huai'an) Energy Storage and Power Generation Co., Ltd.

According to the project plan, 2 sets of 250MW compressed air energy storage units will be built, with a total energy storage capacity of 2,250 MWh, with a total planned investment of about 3.57 billion yuan. The registered capital of the joint venture is 35% of the total planned investment, or 1.25 billion yuan, of which Guoxin Group invested 750 million yuan, accounting for 60% of the registered capital; Suyan Jingshen invested 425 million yuan, accounting for 34% of the registered capital; and Huai'an Industrial Investment invested 75 million yuan, accounting for 6% of the registered capital.

A Financial Services Association reporter noticed that in terms of funding, Guoxin Group and Huai'an Industrial Investment all use monetary investment methods, while Suyan Jingshen invests in the form of monetary or non-monetary assets. Some industry analysts believe that “non-monetary assets” are probably the company's own “salt chamber” resources.

According to public information, Suyan Jingshen is mainly engaged in salt mining and the production and sale of salt and salt chemical products. Major products include table salt, two-alkali industrial salt, small industrial salt, and soda ash.

At the same time, the company's 2023 semi-annual report shows that in recent years, the two major chains of the “saline-alkali calcium circular economy industry chain” and “salt-cavity energy storage industry chain” have been thoroughly built, and advantages such as salt chamber resources, brine consumption, and technological innovation have been accumulated, and a new pattern of “salt-+energy storage” industry development has been constructed.

A Financial Services Association reporter learned from the industry that salt caves (salt cavities) use water-soluble mining methods to form artificial underground caves in salt layers 500 to 2,000 meters deep. The size and shape of salt caves are determined according to different geological conditions, and their volume can be as high as one million cubic meters.

An energy storage industry insider told the Financial Federation reporter, “As a huge and safe underground space, the salt chamber is also receiving more and more attention from companies related to the energy sector. Technically speaking, when there is an excess of electricity, the compressed air is stored in a sufficiently large chamber to convert the electric energy into compressed air potential energy. When electricity is needed, high-pressure air is heated and enters the expander to become normal pressure air. In this process, the generator is driven to generate electricity, and the compressed potential energy of the air can be converted into electric energy output.”

Earlier, Suyan Jingshen and CNPC jointly formed the National Energy Company to promote the construction of the first phase of the Zhangxing gas storage project. In the first half of 2023, they completed main projects such as complex buildings and auxiliary production buildings, main construction of open and closed plants, and installation of major equipment such as power supply systems.

“About before 2010, China carried out practical applications of salt caves in the oil and gas field, using the huge storage space provided by salt caves to store natural gas to achieve peak shifting effects. In recent years, with the “3060” double carbon target, new energy storage is in full bloom, and salt cave storage air has also become the new favorite of major energy companies.” The above sources further stated.

A Financial Services Association reporter learned from the industry that on December 27, 2023, the General Department of the National Energy Administration issued the “Notice on Publicizing New Energy Storage Pilot Demonstration Projects”, showing that a total of 12 compressed air energy storage projects are listed as pilot demonstration projects for new energy storage, and the number of compressed air energy storage projects is only second, with 17 being lower than lithium batteries. According to incomplete statistics, there are more than 45 domestic compressed air energy storage projects built and contracted in 2023, and the scale has already exceeded 10 GW.

Su Yan Jingshen said that this foreign investment to establish a joint venture is in line with the country's strategic plan to build a new power system and is of great strategic significance in promoting the company's “salt+energy storage” industry. The implementation of the project is conducive to leveraging the resource synergy of all parties involved in the joint venture and has a positive effect on the company's industrial development.