Sunfly Electric's Hu Shunquan: Tech, Scenarios and Commercialization Key to Navigating Cycles

By Wang Lining & Xia Xin | China Business Journal

"New-type power grids are built on hard equipment, real technology, practical scenarios, and full consumption," said Hu Shunquan, Director and General Manager of Xinfengguang (688663.SH), during the third season, second episode of the Shanghai Stock Exchange Market · Hard Tech Experts program, titled "New Grids: The Awakening of Computing Power."

Hu noted that the accelerated development of renewable energy, the continuous expansion of energy storage, and the rapid growth of new loads such as AI computing power are driving the power system into a new development phase.

Supply-Demand Shifts Reshape the Grid

The rising share of renewable energy brings consumption pressure, while the growth of new loads like AI computing power demands higher power supply stability. Under these dual pressures, new-type grids are evolving toward better renewable energy consumption, source-grid-load-storage coordination, and efficient power supply for new loads.

For Xinfengguang, a company with over 20 years of experience in power electronics equipment, this shift is also being transmitted to the industrial side. From mature products like low-voltage Static Var Generators (SVG) to energy storage and grid-forming equipment, and further to Solid-State Transformers (SST) for computing-power coordination, the company's product portfolio continues to extend into new application scenarios. Its business model is also expanding from equipment sales to system solutions and full lifecycle services.

From "Complementing" to "Synergy"

In recent years, the construction of new-type grids has accelerated. Hu believes that the dominant role of renewable energy has been largely established, the ultra-high voltage (UHV) main grid continues to improve, and the capacity for renewable energy grid integration and consumption is steadily increasing, leading to changes in the power system structure.

Wind and solar power are characterized by randomness, intermittency, and volatility. As the share of renewables rises, 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 the entry point for power electronics equipment companies into the industrial chain.

Take SVG as an example. Xinfengguang has been deeply involved in high-voltage cascading 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 sets of high-voltage SVG globally, covering scenarios such as photovoltaics, wind power, metallurgy, mining, and data centers.

In Hu's view, the relationship between renewable energy and the grid is not simply "one replacing the other," but rather a process of continuous complementation and synergy. "New players serve the development of renewable energy. Overall, the grid remains the main body, and it is more appropriate to say that others complement it."

This also explains Xinfengguang's technological path over the past two decades: the company has not sought "windfalls" independently of the grid but has continuously adjusted its equipment based on real-world scenarios as renewable energy entered different development stages.

In 2020, Xinfengguang was an early mover in source-grid-load-storage integration demonstrations, combining rooftop photovoltaics, charging piles, and energy storage. Hu explained that the company configured a 2,000 kWh energy storage system. "Storing 2,000 kWh at night was enough for daytime use." When temporary power supply shortages occurred in 2022, the company's own electricity consumption was unaffected.

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 consumption is a key challenge for new-type grid construction, the rapid development of AI computing power has introduced new electricity demand.

"First is energy independence—China must develop renewable energy. Second is renewable energy consumption and grid integration—this is driven by reality. Third is AI—this is driven by computing power," Hu said. He believes that energy independence, renewable energy consumption, and AI computing power are interconnected, while energy storage serves to connect power sources and loads, balancing renewable generation and electricity consumption over time.

Hu likens the new-type grid to the human body: energy storage acts like an "organ," responsible for storing and releasing energy; digitalization functions like the "nervous system," handling communication and control; and computing-power coordination represents the energy system's output to industrial and economic activities. In the energy storage field, Xinfengguang has been increasing its investment, with its 100 MW-level high-voltage cascaded energy storage already achieving large-scale deployment and extending to emergency power supply scenarios in coal mines.

With the rapid growth of new loads such as computing centers and AI, these facilities demand higher power supply stability, power quality, and energy efficiency. There is also room for optimization between traditional AC power supply architectures and the increasing DC loads. Against this backdrop, SST has entered the industrial application horizon. Leveraging its high-voltage cascading technology, combined with CHB (Cascaded H-Bridge) and DAB (Dual Active Bridge) technologies, Xinfengguang is developing SST products. Earlier this year, the company's SST products achieved deployment, with some now in the demonstration phase. According to company materials, a 2.5 MW SST product has been rolled off the production line and is being used in a demonstration project at a smart computing center.

Hu believes that 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. "The combination of 'power electronics + energy storage' can form a future 'energy router.'"

"The energy router is a key device for future smart grids," Hu predicted. He considers grid-forming technology to have the highest certainty and expects it to become a standard feature of new-type power systems within the next three to five years.

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

From Selling Equipment to Selling Solutions

Alongside technological changes, the business models of power electronics equipment companies are also evolving. In the past, equipment companies primarily focused on product sales, with customers or other entities handling operations after delivery. However, as application scenarios for renewable 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 in the future, Xinfengguang will not only sell equipment but also solutions, and will further advance operational digitalization and full lifecycle management. However, this does not mean the company should transform from a "hardware company" into a pure software or service company.

"In the past, we made equipment and sold it off in one go, leaving other manufacturers or the grid to operate it," Hu said. However, in his view, the foundation of solutions and services remains hardware equipment. "A strong energy nation and energy independence cannot be achieved without hardware equipment. It is the entry point and the cornerstone."

Nevertheless, 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. As mechanisms such as virtual power plants and demand response mature further, the value of digital services is expected to gradually translate into more stable commercial returns.

To allocate resources between current performance and future growth, Xinfengguang has adopted an "H1, H2, H3" business framework. H1 represents mature products that generate current revenue and profit. H2 covers growth-stage products that require ongoing R&D investment and are expected to become profitable within the next two to three years. H3 encompasses emerging technologies and products, with a focus on three to five years ahead.

Under this approach, approximately 70% of Xinfengguang's investment goes into mature H1 products, while the remaining resources are allocated to growth-stage and forward-looking businesses.

"A real enterprise must be supported by products," Hu said. Focusing on current performance does not mean the company should abandon long-term R&D. Similarly, a company cannot only talk about the future while neglecting its present operations.

From Chinese Scenarios to Global Markets

The complex application scenarios in the domestic market also serve as an important foundation for Chinese power electronics equipment companies to continuously iterate their technologies. Hu noted that China's regional power environments vary significantly: the western plateau, the eastern high-load areas, the southern high-humidity regions, and the southwestern areas with frequent thunderstorms all impose different requirements on equipment. "What kind of equipment can adapt? Only through generation after generation of progress."

Xinfengguang's SVG products have undergone multiple iterations, with voltage levels expanding from 10 kV to 35 kV and 66 kV, and further developing into specialized products such as high-altitude versions and grid-forming types.

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 automatically mean achieving global brand premium. Hu acknowledged that Chinese companies already have certain product competitiveness in overseas markets, but there is still a gap between exporting equipment and exporting brands and standards. The competitive logic also varies across markets. In emerging markets, Chinese equipment is competitive due to its performance and cost advantages. In high-end markets such as Europe and the United States, factors such as brand recognition, certification systems, standards, and geopolitical and policy environments pose higher requirements for companies seeking to expand further.

Hu believes that in the next phase of "going global," Chinese companies should not focus solely on product exports but should gradually move toward exporting brands, technology, and standards, and actively participate in the formulation of international standards. This process cannot be achieved overnight; it requires steps such as standard mutual recognition, participation in international standard-setting, 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, Xinfengguang is no longer facing competition based on a single product. For power electronics equipment companies, technological iteration, scenario accumulation, and commercialization capabilities remain key to navigating industrial cycles.