Private Enterprises Accelerate Energy Sector Entry by Breaking Down Barriers

Breaking Down Barriers: Private Enterprises Accelerate Their Presence in the Energy Sector

Source: Economic Reference Report

Authors: Dai Xiaohe, Han Jiano

Date: April 23, 2025

Energy is the lifeblood of the national economy. In the first quarter of 2025, under the guidance of the “dual carbon” goals and a new energy security strategy, China’s energy supply has been robust, and the industrial structure continues to optimize. Recent investigations reveal that amidst the wave of transformation and upgrading in the national energy sector, an increasing number of private enterprises are embracing a greener approach and accelerating their development in the energy field.

In March, in Daye, Hubei Province, the ±800 kV ultra-high voltage converter transformer independently developed by TBEA Group was successfully installed at the Daye Converter Station, supporting the implementation of the “West-East Power Transmission” strategy. Meanwhile, on the coast of the Yellow Sea, the country’s first “carbon-neutral” offshore megawatt wind turbine, which features the world’s first fully integrated drive train developed in-house by Envision Energy, was officially launched in Jiangsu. Further north, on the Inner Mongolia grasslands, Edman Hydrogen Energy has begun construction on its grid-side energy storage project.

This year, from the construction of ultra-high voltage backbone networks to the manufacturing of new energy equipment, more private enterprises are deeply involved in building a new energy system, making significant contributions in key areas such as power transmission, clean energy generation, and flexible peak shaving.

“We will continue to open up competitive areas of infrastructure to all types of business entities on fair terms,” stated the recent private enterprise symposium held in February, which further signaled the intent to dismantle market access barriers and promote the development of the private economy. Zhang Xing, spokesperson for the National Energy Administration, indicated that this year, China will intensify efforts to support capable private enterprises in various forms of participation in oil and gas exploration and development, as well as in the construction of power facilities, thereby encouraging investments in new technologies and new business models such as energy storage and smart microgrids.

The shift from “high barriers” to “broad access” is continuously invigorating the growth potential of private enterprises. In the nuclear power sector, since 2020, private enterprises like Geely Group and Wanxiang Group have participated in project investments through shareholding. The National Energy Administration reported that the five latest approved nuclear power projects as of August 2024 have a total investment of approximately 245.5 billion yuan, with a 10% investment ratio from private enterprises.

Private companies such as Shentong Valve in Jiangsu, Shangshang Cable, Jiuli Special Materials in Zhejiang, and Fangda Carbon in Gansu are thriving as China’s nuclear power equipment manufacturing industry advances to higher levels. These private enterprises specialize in niche markets such as nuclear-grade valves, pipes, cables, seals, and graphite materials, overcoming critical technology bottlenecks and complementing the advantages of large state-owned enterprises focused on main equipment, thus becoming crucial components of China’s nuclear power industry chain.

“This progress is driven by a synergy between policy guidance and market mechanisms,” Zhang stated. The National Energy Administration and other departments have introduced policies such as a demonstration list for first-of-a-kind equipment and significant technological projects to guide private enterprises to allocate 5% to 8% of their revenue towards core technology research. Additionally, through mechanisms like “leading by ranking” and “competitive racing,” collaborative platforms for industry, academia, and research have been established, shortening the average research and development cycle for cutting-edge technologies by 18 months and increasing patent conversion rates by nearly 40% compared to three years ago.

The establishment of an innovative ecosystem is accelerating the growth of China’s energy industry. Envision Energy has become the world’s first wind turbine manufacturer to achieve self-research, production, and mass application of sliding bearings, resulting in 500 units operating without failure and strongly supporting the large-scale development of wind turbines. Ruijin Hydrogen Energy has developed the country’s first alkaline photovoltaic off-grid hydrogen production equipment, which has successfully passed EU certification. Hydrogen Energy’s anti-corrosion electrolyzer technology has extended the lifespan of seawater hydrogen production equipment to over 30,000 hours, laying the technical foundation for the world’s first 200 MW offshore hydrogen platform.

These technological breakthroughs from private enterprises not only fill domestic gaps but also promote China’s participation in the formulation of international energy technology regulations. Currently, the level of openness in the energy sector continues to deepen, creating a favorable environment and ample space for private enterprises to engage in energy project development and construction. According to the latest data from the National Energy Administration, private enterprises account for about 60% of wind turbine manufacturing companies, and a significant majority of photovoltaic equipment manufacturers are private enterprises.

In the solar power sector, leading companies including CATL, Sungrow Power, Dalian Rongke, and China Storage Energy have emerged, collectively advancing the progress of new energy storage technologies in China. At present, there are over 2,400 private power sales companies, representing nearly 60% of the total. Approximately 600,000 retail users purchase electricity through the retail market, achieving a retail transaction volume of 3.6 trillion kilowatt-hours last year, which accounted for 58% of the market’s trading volume.

Furthermore, independent storage, virtual power plants, and charging operators have developed vigorously, leading to the emergence of new models and business formats in which various entities interact beneficially. Recently, Shanghai released 26 work measures across six areas to promote the high-quality development of the private economy, including policies to support the construction of power system regulation capabilities and encourage private enterprises to enter fields such as virtual power plants, vehicle-grid interaction, and new energy storage.

Currently, there are over 10,000 various charging operators in the country, with private enterprises accounting for over 80% among those operating more than 10,000 charging facilities. The four largest operators—TELD, Star Charging, YK Charging, and Xiaojuchong Charging—are all private enterprises, collectively holding over 50% market share.

From desert solar to deep-sea wind power, from hydrogen fuel heavy-duty trucks to large nuclear power projects, an increasing number of private enterprises, leveraging their technological advantages and market sensitivity, have become indispensable forces in the construction of the national new energy system, moving towards a brighter future in embracing green development.