Business / Companies

Xuji seeks takeover targets globally in contract push

By YANG ZIMAN/SHI BAOYIN (China Daily) Updated: 2016-05-27 08:59

Xuji Group Corp, a subsidiary of State Grid Corporation of China, is on the hunt for small and medium-sized takeover targets internationally, in an effort to help it win electricity transmission contracts around the world.

Zhao Bin, director of the group's international affairs department, said its search is likely to start in Asia and Africa, and focus on companies that can will help "widen the application of its technology", and increase its contribution to the global energy internet.

Xuji is already involved in building the Belo Monte extra-high voltage, or EHV, direct-current transmission project in Brazil-a deal it won nearly one year ago.

That project aims to transmit power from the northern Amazon River region to populous areas in the south of the country, a distance of more than 2,000 kilometers.

Based in Xuchang in central Henan province, the company claims to own some of the electricity transmission industry's most-advanced technologies, including its ±800 and ±1100 kilovolt EHV transmission systems, which it developed independently.

Its systems are most efficient over long distances, and claim very low energy loss, said Zhang Jian, one of the company's top technical experts.

According to the National Energy Administration, much of the country's energy distribution remains unbalanced, with distances between energy-rich and energy-consumption areas ranging from 800 to 3,000 kilometers

Around 76 percent of coal concentrates are in north and northwestern regions, for instance, and 80 percent of water resources are in southeast regions.

China's wind and solar energy resources are mainly in northwestern regions despite more than 70 percent of the country's energy needs being from eastern areas.

"EHV transmission is the solution for China's energy imbalances, as well as the basis for building the global energy internet-a concept put forward by the State Grid that refers to an intelligent grid that connects different parts of the world," said Zhang.

"The GEI can become the basic platform for large-scale development, distribution and usage of clean energy, globally.

"It is a combination of intelligent grid networks, EHV and clean energy. Eventually the global energy internet will balance out energy distribution throughout the world, such as transporting solar energy generated in Equatorial areas to cities with high-energy consumption."

Zhou Fengquan, Xuji's top EHV expert and director of Xuji 's research and development center, added: "Compared with fossil fuels, clean energy is a lot more abundant, while EHV is the main supporting system for the internet.

"In the future, we will even be able to use clean electricity transferred from the Arctic," Zhou said.

Twenty-seven years after developing its first EHV applications, Xuji has obtained more than 100 patents in the technology, and supplies equipment to 19 EHV transmission projects in China.

The company is also researching several key technologies involved in ultra-long-distance electricity transfer, for transnational and transcontinental distribution.

The core part of EHV is the converter valve, which accounts for half of the investment involved, said Zhou.

Xuji now supplies three-quarters of the control systems, and half the converter valves, used in EHV projects around the globe.

Last year, the company's output value reached 15 billion yuan ($2.3 billion), which delivered profits of more than 1 billion yuan.

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