Cutting-edge technology: Starting with individual stealth equipment

Chapter 120: The total output value target for 2015 was set at 3000 billion.

As Zhao Shuheng finished speaking, another round of applause rang out in the conference room.

He paused for a moment, then summarized in plain language: "To put it bluntly, we've made money off foreigners."

The representatives from other companies present exchanged glances, their faces bearing a tacit understanding.

They knew better than anyone else that before joining the DeepBlue system, the biggest competitors of Chinese photovoltaic companies in overseas markets were often not foreign companies, but rather other domestic counterparts.

In an effort to quickly eliminate excess capacity, companies resorted to low-price bidding, cutthroat competition, and sabotage of each other.

The end result was that no one made money; the profits were completely devoured by foreign buyers and distributors.

Today, DeepBlue Technology, relying on the irreplaceable nature of its singlet fission technology and the patent barriers across the entire industry chain, has given Chinese companies the confidence to set unified prices for foreign companies, resulting in an epic increase in its premium pricing power.

Once prices are raised, profits will naturally follow.

Moreover, Lin Chuan had made a clear plan for production capacity last year. In response to the application of this emerging technology, other companies in the industry have not blindly and frantically expanded their production capacity as they have in the past.

The overall market situation remains somewhat hungry, resulting in demand slightly exceeding supply.

After a moment, Zhao Shuheng continued, "While the industry is developing rapidly, three core issues it faces cannot be ignored."

The words "curtailment of solar power" appeared on the conference screen.

He stated, "Current curtailment of solar power is one of the biggest bottlenecks restricting the industry's development, and the situation is particularly pronounced in the Northwest region."

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Then, a chart showing the curtailment rate of a photovoltaic power station in western China was generated.

In the first three quarters of this year, the average curtailment rate of solar power across the country reached about 12%.

What does that mean?

For every 100 kilowatt-hours of electricity generated, more than 12 kilowatt-hours are generated by white hairs and cannot be transmitted.

The reason why the power cannot be transmitted is simple: the power grid's transmission capacity cannot keep up with the construction speed of the power plants.

The photovoltaic power station has been built, but the ultra-high voltage transmission line is still on the planning drawings.

The electricity cannot be transmitted to the eastern load center and can only be consumed locally. However, the local consumption capacity is limited, so power generation has to be restricted.

Zhao Shuheng pressed the remote pen, and the words "Subsidy in arrears" popped up on the screen.

"You all have more authority to speak on the issue of subsidy arrears than I do." Zhao Shuheng's gaze swept over the several power plant developers in the audience. "To date, the national renewable energy subsidy shortfall has reached 300 billion yuan, and many power plants that have already been connected to the grid have yet to receive their subsidies."

The delay in subsidies directly affects companies' cash flow and reinvestment capabilities, with some companies even having to rely on borrowing new debt to repay old debt in order to stay afloat.

Zhao Shuheng turned to the next page, the last one being about land issues.

The standards for land use tax, farmland occupation tax, and other taxes and fees for photovoltaic power station sites vary from province to province, city to city, and even county to county.

In some places, land used for photovoltaic power stations is taxed as industrial land, while in others it is taxed as agricultural land, and in still others there is no clear definition, leading to huge uncertainty in project investment decisions.

The uncontrollability of non-technical costs has become the most troublesome variable in project return on investment calculations.

He turned off the screen mirroring and returned to his seat.

Lin Chuan leaned back in his chair, his hands clasped on the table, and slowly said, "Everyone is aware of these three issues, but problems arising from development must be solved through development itself."

All eyes in the conference room turned to him.

"The problem of curtailment of solar power is essentially caused by the asynchronous development of the power grid and the power source."

"In the short term, the situation can be alleviated through advancements in energy storage technology, but in the long term, upgrades to the power grid infrastructure are necessary."

"This is not something that one industry or one company can promote alone; it requires coordination at the national level."

"But the root causes of the subsidy arrears and the land issues actually point in the same direction."

Lin Chuan paused for a moment, then continued, "The 'crutch' of subsidies will eventually be removed. The government can't continue subsidizing forever. If the photovoltaic industry continues to rely on subsidies, it will be half-dead the day the crutch is removed."

"The industry must rely on its own technological advancements and cost control to survive independently in the market."

"Once subsidies cease to be the core source of revenue for a project, land costs naturally become a secondary variable."

"DeepBlue Technology's strategic judgment has never changed; reducing costs through technology is the only way out."

Lin Chuan then looked around at everyone.

"Single-linear fission technology has increased the photoelectric conversion efficiency to 42% in actual operation, which is the real foundation for photovoltaic power generation to achieve grid parity."

"DeepBlue Technology will continue to advance technological iteration, and the progress is quite encouraging. In the foreseeable future, it is expected to increase the photoelectric conversion efficiency to over 50%, further reduce the cost per kilowatt-hour, and ultimately enable photovoltaic power generation to achieve a reasonable rate of return without subsidies."

The competitors present thought to themselves, "Just as I expected!" They were glad they had refrained from secretly and blindly expanding production.

Given DeepBlue Technology's ability to iterate its technology, subsequent products will be even better, and the accumulated inventory will eventually become a burden.

In the meantime, they either have to sell off their entire fortunes or go bankrupt.

During the halftime break, representatives from several companies chatted in small groups.

We discussed next year's expansion plans, exchanged experiences in building factories overseas, and discussed strategies for addressing the three core pain points mentioned earlier.

The atmosphere in the meeting room was relaxed, after all, the industry continued to recover and exceeded expectations, and things were getting better.

Fifteen minutes later, the meeting resumed.

"Let's get down to business."

Lin Chuan, who was present at the meeting, opened the documents. The main topic was the output value target for next year, which needed to be finalized.

Lin Chuan surveyed the attendees: "Based on current trends, photovoltaic installations will continue to enter a peak period in 2015, and the industry will maintain a steady upward trend. DeepBlue Technology suggests setting the annual total output value target for next year at 3000 billion yuan."

The company grew to 3000 billion, a figure that the competitors present would not have dared to even dream of before 2012.

At that time, the photovoltaic industry suffered collective losses, which can be described as the industry's darkest moment.

In the blink of an eye, less than two years later, we have entered an era of high growth.

Within the context of today's Deep Blue framework, those present feel it's not impossible.

After all, the production capacity of singlet fission technology is still in the ramp-up phase, and the demand in overseas markets is far from being met. In addition, with the continuous surge in domestic installations, the output value target of 3000 billion yuan is not too aggressive.

At this point, Lin Chuan changed the subject: "However, structure is more important than total volume. A market this large, worth 3000 billion, cannot be achieved solely by expanding production capacity and installing power plants. What I mean is that next year's growth needs to have a clear direction; we can't put all our eggs in one basket—ground-mounted power plants."

At this point, he stood up, walked to the projection screen, and picked up the remote control pen.

A diagram illustrating application scenarios of the photovoltaic industry popped up on the conference screen, labeled with the words "Photovoltaics+".

"I believe that in 2015, we should focus on the 'PV+' model to drive our efforts. This reflects DeepBlue Technology's systematic thinking on the future application direction of the photovoltaic industry."

He pressed the remote control pen, and the first application scenario popped up.

"For example, the scenario of 'photovoltaics + poverty alleviation.' A considerable number of impoverished people in China are still distributed in the central and western regions, which are rich in solar resources. Traditional poverty alleviation methods, such as fiscal transfer payments, industrial poverty alleviation, and relocation, all face a common problem: they fail to create sustainable self-sufficiency."

"Once a photovoltaic power station is built, its operating costs are low, and it generates stable cash flow every year for a power generation cycle of up to 25 or even 30 years."

"If we standardize the integration of photovoltaics and poverty alleviation, with farmers providing their rooftops, village collectives providing land, enterprises providing technology and equipment, and the power grid guaranteeing full purchase, then each photovoltaic poverty alleviation power station can operate sustainably for 20 years."

"Light Savings Account"

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The model of "standard photovoltaic poverty alleviation power station projects, after being built and connected to the grid, simultaneously generating and using the electricity themselves, with surplus electricity sold to the grid" not only saves farmers on electricity bills, but also allows them to sell any unused electricity back to the State Grid.

Representatives from several component manufacturers in the audience were taking notes rapidly.

After a moment, Lin Chuan switched to the next scene: a photovoltaic + agricultural greenhouse.

Lin Chuan explained methodically, "The shading structure of agricultural greenhouses and photovoltaic panels are a natural fit. One advantage of singlet fission technology is its wide spectral response range, which makes it much more efficient at utilizing scattered light than traditional crystalline silicon cells. It can maintain a high conversion efficiency even under conditions of incomplete direct sunlight."

Installing photovoltaic panels on the roof of agricultural greenhouses can turn the greenhouse into a miniature power station without affecting the photosynthesis of crops inside.

For farmers, they earn money from growing vegetables and then earn another income from generating electricity.

For the country, the two strategic directions of facility agriculture and clean energy have been integrated into one project.

Lin Chuan turned to the next page, which was a regional comparison chart of electricity costs in western China.

"Photovoltaics + Western Industry Cluster." Lin Chuan drew a circle around the Northwest region with his laser pointer. "The western region has unique solar resources, vast land, and extremely low power generation costs."

Lin Chuan turned around and looked around at the attendees.

"The biggest challenge we face in building photovoltaic power plants in the west is that the electricity cannot be transmitted out, or it is not easy to transmit it. The transmission capacity of ultra-high voltage power transmission lines has an upper limit, and line losses cannot be ignored. Rather than spending huge sums to transmit electricity to the east, it would be better to move some energy-intensive industries directly to the west."

He pressed the remote control, and a list of specific industry directions popped up on the screen.

"The most typical example is the data center. The cloud computing and big data industries are booming, and the scale of data centers is growing rapidly."

"And the core operating cost of a data center is electricity."

"The combined energy consumption of servers and cooling systems means that electricity costs can account for more than 50% of the total operating costs of a data center."

"If these data centers are built near photovoltaic power plants, using the cheapest and cleanest solar power to drive servers and cooling systems, the operating costs will be significantly lower than similar facilities built in eastern cities."

"Moreover, the climate conditions in the west are also suitable for data center heat dissipation, and the low-temperature air in high-altitude areas is a natural coolant."

The eyes of several power plant developers in the audience lit up; this was an idea they had rarely considered seriously before.

The business model of photovoltaic power plants has long been limited to a single chain of power generation and sales. However, if the power is consumed locally...

Bringing industries to the area locally is equivalent to turning "power generation companies" into "energy investment platforms".

After a moment, Lin Chuan continued.

"In addition, there is the development of modern agriculture. With ample and inexpensive electricity, irrigation, greenhouses, and cold chain logistics in the western region can all be powered by electricity."

"The same applies to desertification control. With the solar panels providing shade and moisture retention, vegetation can gradually recover."

You've probably all heard of the "solar-powered sheep of Tara Beach," now known as the "solar-farming complementary pasture" model, which has proven very effective. What does this show? It shows that solar power is not only an energy solution but also an ecological restoration solution.

A murmur of discussion arose from the audience.

The story of Tara Beach has spread throughout the industry, and the image of sheep grazing under the solar panels has even been captured on video and gone viral online.

Some people call those sheep "photovoltaic sheep," but more people are beginning to realize that behind this seemingly casual "sheep-raising advice" lies a completely new industrial thinking model.

Photovoltaics is not just a simple power generation device; it can also be a complex system that integrates energy, agriculture, ecology, and industry.

Lin Chuan turned off the projection and returned to his seat.

"Of course, domestic application innovation is one aspect, and the export market is another."

He turned to the next page of the document and then looked up at the export business managers present.

"To improve the overall profits of the industry, we need to earn more money from foreigners."

"The profit margin data of DeepBlue's export business in the second half of this year has proven this point. With unified pricing, unified standards, and no price wars, foreign customers still buy our products because our technology is unique in the world."

"Next year, we need to continue to increase our efforts in this area, and fully reflect the premium benefits of new technologies in export pricing, rather than letting our own people undercut each other."

The business partners present nodded in agreement upon hearing Lin Chuan's words.

Several senior executives in charge of overseas business still remember when DeepBlue first started to unify export pricing a year ago, some foreign buyers were so angry that they slammed their fists on the table and threatened to switch to other suppliers.

After a thorough investigation, it was discovered that no company outside the DeepBlue ecosystem had photovoltaic products that could rival DeepBlue Technology's singlet fission technology in terms of efficiency and cost.

After doing the math, I realized that partnering with companies outside the Deep Blue ecosystem is not cost-effective.

In the end, he returned with the money and signed the contract.

At this point, a representative from a component manufacturer in the audience said, "Mr. Lin, regarding the export market, I'd like to ask about the Indian market. Our company is currently evaluating strategic opportunities in India, where there is abundant sunshine and local governments are vigorously promoting photovoltaic installation plans."

He added, "Based on the data, India is likely to become the world's fourth largest photovoltaic market after China, the United States, and Europe. Should we consider making early moves, or even considering building a factory there?"

Lin Chuan couldn't help but laugh when he heard what the other party said. It seemed that the other party had never been tricked by Third Brother before, and actually wanted to go there to build a factory.

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