Cailian Press, July 16th (Reporter Liu Mengran): The Middle East has become the "next stop" for China's photovoltaic industry to go global. Today, after Yangtze Power (300274.SZ) announced the signing of a contract with Saudi ALGIHAZ to build the world's largest energy storage project, JinkoSolar (688223.SH) and TCL Zhonghuan (002129.SZ) announced heavyweight investment plans after the market closed. The former plans to build a 10GW efficient battery and component project in Saudi Arabia, and the latter plans to build a 20GW photovoltaic crystal chip project in Saudi Arabia.

Earlier, top PV companies such as GCL Tech (03800.HK), Hainan Drinda New Energy Technology (002865.SZ), Arctech Solar Holding (688408.SH), and Trina Solar Co., Ltd. (688599.SH) had all announced factory construction plans in the Middle East. A complete photovoltaic industrial chain in the Middle East is emerging, covering upstream and downstream of polycrystalline silicon and important auxiliary materials. Some listed company insiders said that in addition to having the necessary conditions for globalization, the move towards the Middle East is also due to the huge market potential in the region.

Why eager to go to the Middle East? A listed company spokesperson said that besides having the necessary conditions for globalization, it also stems from the huge market potential in the region. Li Xiande, Chairman of JinkoSolar, said today that this is another major milestone in the company's global strategy implementation process, which will further help the company optimize its global manufacturing and marketing layout and enhance its global competitiveness.

Two major polycrystalline silicon leaders announced investment plans on the same day.

After the market closed today, JinkoSolar announced that its wholly-owned subsidiary, Jingke Middle East, and Saudi Arabia's Public Investment Fund ("PIF") wholly-owned subsidiary RELC and Vision Industries Company (VI) signed a "Shareholder Agreement" to establish a joint venture company in Saudi Arabia, with the three parties holding 40%, 40%, and 20% respectively. The joint venture will be included in the company's consolidated financial statements.

The announcement shows that the joint venture will build and operate high-efficiency photovoltaic battery and component projects in Saudi Arabia, with a total investment of approximately 0.985 billion US dollars. After reaching full production, the annual production capacity of high-efficiency photovoltaic battery and components is expected to reach 10GW, which may become the largest manufacturing base for China's photovoltaic battery and component industry overseas.

Cailian Press reporters noted that JinkoSolar's cooperation with Saudi Arabia has a long history. Saudi Arabia has proposed to create the NEOM Future City project, which is expected to cover an area of 26,500 square kilometers and rely completely on new energy for power supply in the future. In May of this year, the NEOM-Oxagon CEO and his team visited JinkoSolar's Shanghai headquarters. According to data provided by JinkoSolar, by 2023, the company's market share in the Middle East will exceed 50%, and its market share in Saudi Arabia will exceed 70%.

RELC, the cooperation party this time, is a wholly-owned subsidiary of PIF, whose main investment target is projects of strategic importance to the Saudi economy and an important execution agency of Saudi Arabia's "2030 Vision" plan. According to Saudi Arabia's plan, 50% of its energy will come from new energy by 2030. At the same time, VI is a leading investor and developer of green energy industry projects and local supply chains in Saudi Arabia.

It is worth noting that the investment plans of RELC and VI also present an integrated layout. In cooperation with JinkoSolar, it covers the battery and component links, while in the silicon wafer link, it establishes a joint venture company with TCL Zhonghuan.

TCL Zhonghuan announced tonight that the company plans to sign a "Shareholder Agreement" with VI and RELC to establish a joint venture company to jointly build a 20GW photovoltaic crystal chip project in Saudi Arabia, with a total investment of approximately 2.08 billion US dollars. In terms of shareholding, TCL Zhonghuan holds 40% of the shares through its wholly-owned subsidiary in Singapore, while RELC and VI each hold 40% and 20% of the shares, respectively.

TCL Zhonghuan stated that the project is based on the consensus between China and Saudi Arabia, serving the Belt and Road Initiative concept and promoting the transformation of new energy in the Middle East and North Africa. From the perspective of responsibilities and division of labor, TCL has become the party exporting technology. In the announcement, TCL Zhonghuan listed the company's technical advantages and manufacturing capabilities and claimed to have achieved a transformation from product output to technology standard output.

According to the agreement, TCL Zhonghuan licensed the required intellectual property rights and proprietary technology to the joint venture company, coordinated upstream and downstream resources, and tried its best to ensure the timely completion of the factory construction. RELC and Vision Industries will support the joint venture company in obtaining the necessary licenses and approvals to operate in Saudi Arabia, and assist the project in obtaining competitive local government support and landing supporting matters, among others.

New destination for PV and energy storage to go global.

Driven by the dual drivers of internal focus on diversified entity industry investment and maintaining energy hubs, Middle Eastern countries are gradually increasing their investment in renewable energy. In addition to cooperating with JinkoSolar and TCL Zhonghuan, and increasing investment in the polysilicon field, Saudi Arabia is also cooperating with more Chinese companies. Today, Suntech Power announced on its official WeChat account that the company has signed a 7.8GWh energy storage project with Saudi Arabia's ALGIHAZ, and this order has refreshed the record of energy storage order scale.

According to the plan, the project is divided into three sites located in Najran, Madaya, and Khamis Mushait in Saudi Arabia. It will begin delivery in 2024 and be fully connected to the grid in 2025.

In terms of products, Suntech Power will deploy more than 1,500 sets of Powerlitan 2.0 liquid-cooled energy storage systems, using AC-cube storage and conversion design, with high energy density to help customers save 55% of land area. The project is equipped with nearly 7.8 million battery cells, which will ensure the energy storage system to be safely and stably connected to the Saudi power grid. After the project is connected to the grid, it is expected to achieve an ultra-long life cycle operation of more than 15 years.

It was noted by reporters from the Financial Association that Suntech Power has signed multiple important orders in Saudi Arabia, including cooperation with EPC engineering giant Larsen & Toubro (L&T) and cooperation with Saudi ACWA Power in the large-scale Neom Future City project.

In addition to Suntech Power, Huawei Digital Energy also completed a 1.3GWh global off-grid energy storage project in June this year. The project is located on the Red Sea coast of Saudi Arabia and is one of the key projects in Saudi Arabia's "2030 Vision" plan.

The Middle East is becoming the next stop for China's light storage to go abroad. Taking Saudi Arabia as an example, the country has become China's sixth largest exporter of photovoltaic components. In 2022, China's export of photovoltaic components to Saudi Arabia was USD 0.31 billion, rising to USD 1.34 billion in 2023. In 2022 and 2023, China's export of photovoltaic components to the Middle East and North Africa exceeded 10GW for two consecutive years.

In addition to Saudi Arabia, other Middle Eastern countries are also vigorously carrying out investment plans: in June this year, GCL Tech announced that its first overseas FBR granular silicon project is expected to land in the United Arab Emirates and is expected to start construction in 2024; PV cell company Hainan Drinda New Energy Technology has also reached an investment intention with the Oman Investment Agency, planning to invest in the construction of 10GW TOPCon high-efficiency photovoltaic cell production capacity in Oman, with a total investment of USD 0.7 billion.