Top 6 energy storage business leasing companies in China
With the development of battery technology and the implementation of policies for renewable energy, the large-scale energy storage business is constantly developing. The leasing service of energy storage business has also emerged as the times require.
Energy storage leasing, that is, leasing the capacity of energy storage stations to the new energy power station that needs to be equipped with energy storage, and charges the lease fee.
The top 6 energy storage business leasing companies in China are: Huarong, China Resources, State Grid, RHZL, Kangfu, Wanrong.
Profit sources of energy storage business
In terms of application scenarios, more frequency regulation projects that are mainly applied to the power generation side, which is estimated to be related to the current status of the business model of the energy storage industry.
The main profit sources of the energy storage industry include: participating in peak regulation (electricity spot market or auxiliary service market) + frequency regulation (ancillary service market), and will increase capacity leasing mode in the future to increase revenue.
According to the data, the frequency modulation mileage cost in 2022 was 3.47 RMB/MW. Assuming that the frequency modulation compensation standard is 7.5 RMB/MW, it corresponds to the 10-year life cycle of independent energy storage projects participating in frequency modulation (6000 cycles, 2% annual attenuation), and the IRR will reach 14.91%, which is much higher than the income of peak regulation alone, and can fully cover the financing cost.
If the energy storage station can carry out peak regulation + frequency regulation at the same time, the IRR can rise to 18.61%, which is a considerable rate of return. However, there are currently few cases on the grid side and user side, mainly for coal-to-electricity heating projects and a small number of energy storage power station + charging station integration projects.
How to open the grid-side and broader user-side energy storage business is the current leasing circle issues that should be concerned.
Top 6 energy storage business leasing companies in China in 2023
Huarong
| Established date | 1986 |
| Global headquarters | Hangzhou, Zhejiang, China |
| Company website | www.hrflc.com |
Huarong Financial Leasing Co., Ltd. is one of the first batch of financial leasing companies in China and a well-known brand in the industry. The predecessor of the company was Zhejiang Provincial Leasing Co., Ltd. established in 1986. The company is headquartered in Hangzhou, Zhejiang Province, with Ningbo and Jinhua branches and a wholly-owned subsidiary Huarong Shipping Financial Leasing Co., Ltd.
Huarong Financial Leasing mainly provides customers with customized financial solutions through equipment-based financial leasing business. Its main business includes sale and leaseback, direct lease and operating lease.
Its service areas include high-end equipment, infrastructure, environmental protection and water affairs , transportation and logistics, information technology, pipe corridor engineering, new energy, medical and health, cultural tourism and so on.
Huarong Financial Leasing is one of the earliest leasing companies in China to develop energy storage business. Back in May 2017, Huarong has cooperated with a thermal energy storage company. The leased items are electric thermal energy storage furnaces and other equipment, and the financing amount exceeded 4 billion RMB, with a lease term of about 10 years.
China Resources
| Established date | 2006-06-27 |
| Global headquarters | Shenzhen, Guangdong, China |
| Company website | www.cr-leasing.com |
China Resources Financial Leasing Co.,Ltd was established in 2006. It is a wholly-owned subsidiary of China Resources Group specializing in financial leasing business. It is an important member of the group sector with a registered capital of 3.084 billion RMB, with an asset scale of over 20 billion RMB.
China Resources Energy Services Co., Ltd., a wholly-owned subsidiary of China Resources Financial Leasing, relies on its financial background and invests in multiple ways such as contract energy management or a combination of stock and debt.
It can provide energy conservation and environmental protection consulting services, energy conservation and environmental protection program design, energy conservation and environmental protection project contracting, sales of energy-saving and environmental protection equipment, investment and operation of new energy power stations such as distributed photovoltaics, etc.
The main business areas include contract energy management projects, distributed photovoltaic projects, contract environmental management projects, industrial energy-saving transformation, new energy-saving projects, such as natural gas distributed energy, energy storage projects, etc.
China Resources Financial Leasing’s energy industry business is based on China Resources Financial Leasing’s energy industry background, and provides financing, investment, Energy efficiency analysis and other integrated services.
Mainly using direct lease, leaseback, and factoring as the main financing methods, combined with business models such as equity pledge and trust structure, to provide customers with professional, personalized, and comprehensive fund-raising solutions to meet the different needs of enterprises at different stages of development.
In November 2018, China Resources Financial Leasing successively carried out direct financial leasing business for the energy storage and frequency modulation projects of Fengrun Power Plant and Haifeng Power Plant, which are subordinate power plants of China Resources Group. Fengrun Power Plant is located in Tangshan, Hebei. Its energy storage project has a scale of 9MW/4.5MWh. It is invested by Ruineng Century.
It is the first energy storage and frequency regulation project officially put into operation under China Resources Power. Haifeng Power Plant is located in Shanwei, Guangdong, and the scale of the energy storage power plant is 30MW/14.93MWh.
State Grid
| Established date | 2011-07 |
| Global headquarters | Tianjin, China |
| Company website | www.ydht.com |
State Grid International Leasing Co.,Ltd was established in July 2011, mainly engaged in financial leasing business. As of the end of 2021, State Grid Leasing has a registered capital of 12.3 billion RMB, total assets of 134.9 billion RMB, and a credit rating of AAA.
In terms of new energy, State Grid focuses on clean energy power industries such as wind power, photovoltaic power, and hydropower, serving “carbon peaking and carbon neutrality” and helping the green development of the energy industry. Through business models such as direct leasing and sale-and-leaseback, State Grid provides customers with medium and long-term financial guarantees to ease the financial pressure.
In 2021, State Grid Leasing completed the capital investment of RMB 63.292 million for the Hemp Energy Yangxi energy storage and frequency regulation direct lease project. The energy storage and frequency regulation project designed a flexible rental plan according to the customer’s cash flow forecast. The total contract period was 48 months, and the first 6 months was a grace period, when only the interest was required but not the principal.
The rest 42 months required unequal repayment of the principal, and the monthly repayment method effectively reduced the pressure on customers to repay the loan. The project was also successfully selected in Tianjin A typical case of leasing companies supporting the development of green industries.
RHZL
| Established date | 2014-03 |
| Global headquarters | Shanghai, China |
| Company website | www.cpirhzl.com |
RHZL, or Ronghe Leasing Co., Ltd., was established in Shanghai Free Trade Zone in March 2014 with a registered capital of US$1.507 billion (equivalent to RMB 10.035 billion). It is positioned as an “energy ecosystem integrator” and the company focuses on non-nuclear power.
And the financial leasing business of the energy industry, helping the member units of the State Power Investment Corporation (SPIC) to raise funds and reduce financial costs by means of financial leasing and commercial factoring.
Overall, relying on SPIC’s rich channel resources and industry operation experience in the electric power field, the company already has a certain competitive advantage in the field of electric power equipment financing and leasing.
The field of energy storage is a key area of RHZL. RHZL has created a standardized product of “Super Energy Unit”, which includes energy storage power station control system, battery system and inverter system based on distributed industrial controller. And you can also click to check top 10 battery management system suppliers.
Through financial leasing and operating leasing, RHZL provides customers with industry-leading “battery bank” services, which can be used for power generation side peak regulation, frequency regulation, user side peak shaving and valley filling, to solve all-field scenarios such as wind power curtailment and data center backup power, and create a new business model of clean energy and comprehensive smart energy power supply.
On the power generation side, in December 2020, the power side frequency regulation 18MW/9MWh energy storage project was launched with Xinchang Power Plant of SPIC Jiangxi Company.
For the chemical energy storage business, the leased items include 64 sets of 136kWH energy storage battery clusters and 160 sets of 100kWH energy storage battery clusters provided by Hefei Guoxuan High-tech Power Energy Co., Ltd., with a total value of more than 48 million RMB.
In 2022, RHZL adopted the mode of operating leasing to formulate an overall project solution for the 5MW/18MWh user-side energy storage project of Changzhou Yongzhen Technology, cooperate with operating units and carrying companies, and charge fixed equipment from carrying companies and operating end users and service rent, to obtain peak-to-valley price difference and operating income of battery assets.
The innovative project of the operating leasing model of energy storage assets was awarded the “Innovation Case in the Field of Green Leasing” by Shanghai Financial Leasing Industry Association.
Kangfu
| Established date | 1988-06-24 |
| Global headquarters | Beijing, China |
| Company website | ckfil.com.cn |
China Kangfu International Leasing Co., Ltd. is one of the first batch of approved Sino-foreign joint venture financial leasing companies in China. It was formally established in 1988 and became the first large central enterprise holding financial leasing company listed.
The company has been committed to promoting the development of China’s energy industry and equipment manufacturing industry, striving to become the first brand in equipment manufacturing industry and power energy industry leasing.
The company implements a professional business model, and carries out financial leasing business and operating leasing business in the fields of equipment manufacturing industry, electric power energy industry, education and medical industry, etc., and provides customers with customized personalized, one-stop operation and service for energy storage solutions.
Kangfu Leasing regards the new energy industry as an important strategic business of the company. Through cooperation with Beijing Herui Energy Storage Technology Co., Ltd. within the group, Kangfu Leasing has realized the joint force of economic value evaluation and capital, and promoted the implementation of energy storage projects.
On the user side, the heating project of 26 schools in Shenyang City has been successfully implemented. Through the “coal-free” clean energy transformation of electric energy storage, the heating area has been transformed to 377,000 square meters, benefiting more than 10,000 teachers and students.
Wanrong
| Established date | 2012-10-17 |
| Global headquarters | Zhejiang, China |
Wanrong Leasing is the first Chinese pilot financial leasing enterprise in Jinhua, Zhejiang, and a wholly-owned subsidiary of Zhejiang Wanliyang Co., Ltd.
The company specializes in financial leasing, operating leasing, leasing transaction consulting and other economic businesses, providing financing and financing convenience for enterprises and institutions, especially providing financing services for small and medium-sized enterprises, and solving the financing difficulties of small and medium-sized enterprises.
The main direction of the company’s business is the financing leasing of technological transformation equipment for small and medium-sized enterprises. The main industries involve energy conservation, environmental protection, transportation, medical equipment, construction machinery and public infrastructure.
In 2019, Zhejiang Wanrong Leasing used the form of sale and leaseback to participate in Luheng Energy’s completion of the first grid-connected lithium battery and thermal power joint frequency modulation project in Guangdong.
The scale of the energy storage power station is 9MW/4.5MWh, and the total lease price was RMB 46.3668 million, held by Guangzhou Luheng Energy Service Co., Ltd., a lithium ion battery company, also a subsidiary of Zhejiang Wanliyang Group. The power station equipment comes from Kelu Electronics. The lease term was 2 years, and the annual lease rate was 7.68%.
On March 12, 2021, Wanrong Leasing and Zhejiang Wanliyang Energy Technology Co., Ltd. signed the “Financial Lease Contract” and “Leased Property Sales Contract” (leaseback) and other assets to carry out financial leasing business with Wanrong Leasing in the form of sale and leaseback.
The total lease price was RMB 60 million, the annual lease rate of financial leasing was 8%, and the term of financial leasing was 60 months. During the lease period, Wanliyang Energy Company continued to use the leased property in the form of leaseback, and at the same time pay rent to Wanrong Leasing as agreed.
