Shandong New Fenguang's Hu Shunquan: New energy and grid synergy key, not simple replacement

From "Backup" to "Synergy"

At the recent third season, second episode of the Shanghai Stock Exchange Forum: Hard Tech, Hard Talk program, titled "New Grid: Computing Power Awakening," industry experts discussed the dual pressures facing China's power grid: rising renewable energy penetration creating absorption challenges, and surging AI computing loads demanding greater supply stability.

These shifts on both the supply and demand sides are accelerating the evolution of new power grids toward renewable energy absorption, source-grid-load-storage coordination, and efficient power supply for new types of loads.

For New风光 (Xinfengguang), a company specializing in power electronics, this transformation is now reaching the industrial level. From mature equipment such as low-voltage Static Var Generators (SVG), to energy storage and grid-forming equipment, and further to Solid-State Transformers (SST) designed for computing-power coordination, the company's product portfolio continues to expand into new application scenarios. Its business model is also evolving from equipment sales to system solutions and full lifecycle services.

Over the past several years, the construction of new power grids has accelerated. Hu Shunquan, a company representative, noted that the dominant role of new energy has been largely established, and the structure of ultra-high voltage (UHV) power systems is changing accordingly.

Wind and solar power are characterized by randomness, intermittency, and volatility. As the share of new energy increases, the power system must not only address "whether there is electricity" but also ensure stable grid integration of renewables and effective matching of supply and demand. This is precisely where power electronics equipment companies enter the industrial chain.

Taking SVG as an example, New风光 has深耕 high-voltage cascade technology for over 20 years. Its high-voltage SVG improves power quality and provides reactive power support, earning the company the title of National Manufacturing单项冠军 (Single Champion). The company has deployed over 10,000 high-voltage SVG units globally, covering photovoltaic, wind power, metallurgy, mining, and data center applications.

In Hu's view, the relationship between new energy and the grid is not simply "one replacing the other," but rather a continuous process of backup and synergy. "New manufacturers serve the development of new energy. Overall, the grid remains the main body, and others play a supporting role," he said.

This perspective explains New风光's technological path over the past two decades: the company has not sought "hot spots" independent of the grid but has continuously adjusted its equipment based on real-world scenarios as new energy entered different development stages.

In 2020, New风光 was an early mover in demonstrating source-grid-load-storage integration, combining rooftop solar, charging piles, and storage systems.

Hu emphasized that true technological competitiveness does not lie in laboratory parameters but must be repeatedly validated in real-world scenarios.

Computing Power Opens New Scenarios for Power Electronics

If renewable energy absorption is a key challenge for new grid construction, the rapid development of AI computing power has introduced new electricity demand.

"First, energy independence—China must develop new energy. Second, renewable energy absorption and grid integration—this is driven by reality. Third, AI—this is driven by computing power," Hu said. He believes that energy independence, renewable energy absorption, and AI computing power are interconnected, with energy storage serving as the link between power sources and loads, balancing generation and consumption timing.

Hu likened the new grid to the human body: energy storage functions like an "organ," responsible for storing and releasing energy; digitalization acts like the "nervous system," handling communication and control; and computing-power coordination represents the energy system's output to industry and economic activities.

In the energy storage field, New风光 has been increasing its investment in recent years. Its 100-megawatt-class high-voltage cascade energy storage systems have achieved large-scale deployment and have been extended to emergency power supply scenarios in coal mines.

Hu believes the value of SST goes beyond simply upgrading transformer technology. By further integrating power electronics, energy storage, and multi-port energy management, SST has the potential to handle more complex energy distribution functions. "Power electronics plus energy storage can form a future 'energy router,'" he said.

As the share of new energy increases, traditional synchronous units face new requirements for rotational inertia and voltage support. Grid-forming converters and grid-forming energy storage can provide such support. Therefore, Hu believes that future power electronics equipment must not only be able to "connect to the grid" but also possess "grid-forming" capabilities.

From Selling Equipment to Selling Solutions

Alongside changes in technology, the business models of power electronics equipment companies are also evolving. In the past, equipment companies primarily completed equipment sales, with customers or other entities handling operations after delivery. However, as application scenarios involving new energy, energy storage, and computing-power coordination become increasingly complex, customer demands are shifting from "providing a device" to "solving a problem."

Hu stated that New风光 will not only sell equipment in the future but also provide solutions, further advancing operational digitalization and full lifecycle management. However, this does not mean the company should transform from a "hardware company" into a purely software or services company.

"In the past, we sold equipment once and left operations to other manufacturers or the grid," Hu said. Now, New风光 has extended its offerings from pure equipment sales to system solutions, digital operations, and full lifecycle management. Nevertheless, he believes that solutions and services are still based on hardware. "An energy-strong nation and energy independence cannot do without hardware equipment. It is the entry point and the foundation."

This is Hu's core judgment on the changing business model of power electronics equipment companies: while solutions and services represent incremental growth, hardware remains the foundation.

However, moving from "selling equipment" to "selling solutions and providing services" does not mean the new business model is already mature. Whether solutions and digital services can generate stable revenue depends on the improvement of the electricity market mechanism. Currently, the implementation of related businesses still relies on policies and electricity pricing mechanisms, with digital services primarily playing a value-added and enabling role.

This means that for power electronics equipment companies, cultivating new businesses takes time, while mature businesses must continue to support corporate operations and R&D investment. To balance current performance with future growth, New风光 has adopted an "H1, H2, H3" business framework. H1 represents mature products that generate current revenue and profit; H2 represents growth-stage products requiring ongoing R&D investment and expected to become profitable within two to three years; and H3 represents emerging technologies and products with a horizon of three to five years.

Under this approach, New风光 allocates approximately 70% of its resources to mature H1 products, with the remainder directed toward growth-stage and forward-looking businesses.

"A real enterprise must be supported by products," Hu said. Focusing on current performance does not mean abandoning long-term R&D; similarly, companies cannot only talk about the future while neglecting present operations. Mature products provide cash flow and profit to sustain R&D; growth-stage products meet future market demand; and forward-looking technologies prepare for longer-term development.

From China's Scenarios to Global Markets

China's complex domestic application scenarios have become an important foundation for the continuous iteration of power electronics equipment technology. Hu noted significant differences in power environments across China: the western plateau, eastern high-load areas, southern high-humidity regions, and southwestern areas with frequent thunderstorms all impose different requirements on equipment. "What kind of equipment can adapt? Only through generation after generation of progress."

New风光's SVG products have undergone multiple iterations, with voltage levels expanding from 10kV to 35kV and 66kV, and further developing specialized products for high-altitude and grid-forming applications.

In Hu's view, rich application scenarios drive technological iteration, while a complete industrial chain supports product scaling and cost optimization, providing a foundation for Chinese power electronics equipment to go global.

However, "going global" does not yet mean establishing a global brand premium. Hu acknowledged that Chinese companies already have certain product competitiveness in overseas markets, but there is still a gap between equipment export and brand and standard output. Competition logic varies by market: in emerging markets, Chinese equipment is competitive due to performance and cost advantages; in high-end European and American markets, factors such as brand recognition, certification systems, standards, and geopolitical and policy environments impose higher requirements for further market expansion.

Hu believes that the next phase of "going global" for Chinese companies should not focus solely on product export but should gradually move from product and service output to brand, technology, and standard output, actively participating in international standard-setting. This process cannot be achieved overnight and requires steps such as standard mutual recognition, participation in international standard development, and overseas demonstration applications, gradually enhancing the influence of Chinese companies in the global industrial chain.

From SVG to energy storage, from grid-forming equipment to SST, and from complex domestic scenarios to overseas markets, New风光 now faces competition that goes beyond individual products. For power electronics equipment companies, technological iteration, scenario accumulation, and commercialization capability remain key to navigating industrial cycles.

(Source: China Business Journal)