As Hou Jinlong, senior vice president of Huawei and president of Huawei Digital Energy Technology Co., Ltd., said, "Intelligence and low carbon are the two major deterministic development trends in the next 30 to 40 years. Intelligence requires digital technology, low carbon is inseparable from power electronics technology, the global energy industry is moving from resource dependence to technology-driven. ”
In this way, under the background of the dual carbon target, a trillion-level industry that integrates digital technology and electronic power technology - digital energy came into being. At present, major companies are accelerating their entry into the digital energy industry, and Huawei, as a technology giant, is also in a heavy position.
Carbon-neutral energy business
In the energy sector, Huawei is not a "recruit." In 2011, Huawei established a network energy product line, taking photovoltaics, data center energy, and site energy as the strategic direction of the energy component.
Due to the previous accumulation and experience, after Huawei entered the photovoltaic inverter market in 2012, it took only two years to rank first in shipments. According to the 2020 global PV inverter supplier market ranking released by Wood Mackenzie, Huawei's shipments have accounted for 23% of the world's shipments.
In May 2020, Huawei Network Energy changed its name to "Huawei Digital Energy". From "network energy" to "digital energy", the difference between the two words, where is the difference? What exactly is digital energy?
According to Huawei's explanation of Digital Energy, energy digitization is the introduction of digital technologies such as connectivity, AI, big data, and IoT, integrating power electronics technology with digital technology innovation, adding bitstreams on the basis of watt streams, managing watts with bits, and realizing full-link interconnection, digitization, and intelligent collaboration, so as to maximize power production efficiency, operation and maintenance efficiency, and energy efficiency.
For example, Shaanxi Mobile's Xixian prefabricated modular data center uses Huawei's indirect evaporative cooling solution to maximize the use of natural cold sources (10 months a year), reducing power consumption by more than 50% and saving more than 40% compared with the frozen water solution. The 10-year cycle can save nearly 60 million kWh of electricity, save more than 400,000 tons of water, and reduce carbon emissions by 27,000 tons, which is equivalent to planting 37,000 trees.
Shaanxi Mobile Xixian prefabricated modular data center
A year later, Huawei Digital Energy was founded.
For the logic of choosing to set up a digital energy company last year, Huawei Digital Energy mentioned two key elements: the background of the era of carbon neutrality and customer needs.
The former is the general trend, under the general trend, green and low-carbon transformation has become the only way for enterprises. On the road that enterprises must go through, what Huawei Digital Energy has to do is to be the "water seller".
Huawei Digital Energy believes that the key path to achieving carbon neutrality is to reduce carbon and clean energy on the power generation side and use clean energy as much as possible to achieve power generation; the second is to electrify the power side, by changing our travel to electrification, using oil into electrical consumption, reducing carbon emissions; and third, improving overall energy efficiency through digitalization and intelligence in the future.
However, in addition to these reasons, there is also a fact from Huawei itself that cannot be ignored: under several rounds of external sanctions, Huawei's consumer business, which was originally booming, came to an abrupt end.
In the second quarter of 2020, Huawei still has a market share of up to 20% in the global high-end mobile phone market, second only to Apple. However, by 2021, Huawei's sales fell by 68% year-on-year. In 2021, Huawei's revenue fell by 28.6% to only 636.8 billion yuan.
Huawei must find new revenue streams to make up for the losses caused by the decline in mobile phones. Guo Ping, rotating chairman of Huawei, pointed out that in 2022, Huawei will strategically focus on the field of ICT infrastructure and intelligent terminals, and quickly meet customer needs and create commercial and social value through the pilot operation of industrial subsidiaries and legions.
According to the Titanium Media App, Huawei Digital Energy currently has about 6,000 employees, accounting for 60% of R&D employees, and has set up 12 R&D centers in China, Europe, Asia-Pacific and other places, with more than 1,600 patents (as of the end of 2021), and Huawei's digital energy business has shown a steady growth trend.
Digital energy is a key enabler of green ICT infrastructure, and seizing this opportunity may allow the digital energy business to become a new growth point.
"Heavy" digital energy
At present, Huawei is also "restocking" digital energy.
Why? It is not difficult to see the hints from some recent actions:
On June 7, 2021, Huawei's digital energy business was independent and huawei digital energy technology co., ltd. was established, and many of the fifteen legions established since October last year are related to digital energy business.
In this regard, it is widely believed that the digital energy business will become one of the new drivers of Huawei's growth. In March, Huawei's latest annual report did show this trend: Huawei's digital energy business segment grew by more than 30% in 2021.
Although Huawei did not announce a specific revenue plan, it can also have a general understanding from the revenue targets of the two major legions of smart photovoltaic and data center energy announced at the inaugural meeting of the legion last year.
The performance target of the smart photovoltaic corps is 20 billion yuan in 2022 and 30 billion yuan in 2023; the performance target of the data center energy corps is 15 billion yuan in 2022 and 22.5 billion yuan in 2023. According to this goal, that is to say, this year's digital energy smart photovoltaic and data center energy two sectors will contribute about 35 billion yuan of revenue to Huawei.
At the 2021 results conference, Huawei's digital energy business was slightly adjusted, the module power supply was adjusted to "embedded power supply", and "integrated smart energy" was added on the original basis. At present, Huawei's digital energy business mainly includes smart photovoltaics, data center energy, site energy, smart electric, embedded power, and integrated smart energy.
From the perspective of these business segments, we can understand that the digital energy it wants to do is to provide clean power generation, transportation electrification, site energy, data center energy, embedded power supply and other products and solutions for enterprise and industry customers. Through these products, Huawei will move towards every subdivision of industry and industry that is interconnected with energy, and to all aspects of energy supply and demand, transportation and travel, which are closely related to households.
The smart photovoltaic sector is one of the most familiar sectors in the industry for Huawei's energy business, and its inverter business sales are also leading the world. But the photovoltaic inverter obviously cannot meet Huawei's ambitions in the photovoltaic field. Energy storage and photovoltaics are inherently inseparable, and they are also an inevitable extension of the development of photovoltaics.
Shortly after the independence of digital energy, with years of preparation and technology accumulation in the field of photovoltaics, Huawei Digital Energy signed a contract with Shandong Electric Power Construction Third Engineering Co., Ltd. for the Saudi Red Sea Project.
According to the official introduction, Huawei Digital Energy will provide overall solutions for optical storage to The Red Sea New City, including 1300MWh energy storage and 400MWp photovoltaics. When completed, the project will meet the energy needs of millions of people, and the Red Sea New City will become the world's first 100% light storage energy supply city.
For being able to win the world's largest energy storage project, Huawei Digital Energy attributes it to two reasons, on the one hand, Huawei's technology can solve the problems that customers are concerned about. For example, the problem of safe and stable operation of large-scale optical storage independent networking, as well as the problem of power supply cost. According to the Titanium Media App, huawei's digital energy optical storage overall system life cycle electricity cost is less than 10 cents. On the other hand, it can bring more value to customers, such as short delivery cycle, simple maintenance and replacement during the life cycle, distributed temperature control technology, ensuring longer life of energy storage and active early warning and active safety of energy storage systems.
Caitong Securities expects that by 2030, the installed capacity of new energy storage is expected to reach 150GW, and according to the 2-hour configuration time, the full market-oriented energy storage space will exceed 1.2 trillion yuan.
Under the huge market space, Huawei digital energy will accelerate the promotion of photovoltaics to become the main energy source of new power systems. Because the energy storage system is ubiquitous in all aspects of the "generation, transmission, distribution and use" of the new power system, it plays the role of "reservoir" and "regulator and stabilizer", and has become the main system from the original backup system to ensure the safe and stable operation of the power grid. Electrochemical energy storage is currently a universal energy storage technology, but the battery is not equal to the energy storage system. The energy storage system is an overall system that integrates electrochemical technology, power electronic technology, digital technology, heat dissipation technology, and even AI technology, and uses the controllability of power electronics and digital technology to solve the inconsistency and uncertainty of the battery and ensure the efficiency and safety of the energy storage system.
In addition, in the field of data center energy, China Unicom Zhongyuan Data Base adopts Huawei's iCooling solution, which realizes the global optimization of energy efficiency, effectively reduces the data center PUE, and saves about 8.32 million kWh of electricity per year; in the field of site energy, Huawei, Hangzhou Mobile and Mobile Design Institute jointly created a "smart super station" to achieve 1 cabinet for 6 cabinets and stacked storage, saving 58% of electricity consumption per station per year and reducing carbon emissions by 8 tons.
Of course, energy digitalization for the ICT industry, in addition to feeding back the technical capabilities of other industries, can also meet the rapid demand for their own carbon reduction. For example, in Shenzhen's Futian District, Huawei's digital energy Antuoshan base, which is under construction, will be built into a "light storage and direct soft" near-zero carbon park.
Attack the trillion new market
According to the Prospective Industry Research Institute, in 2020, the scale of digital industrialization will reach 7.5 trillion yuan, accounting for 7.3% of GDP; in terms of energy, mainland energy consumption in 2014-2020 has accounted for more than 20% of the world.
That is to say, the digital energy derived from the cross-derivation of the two will become a trillion-dollar starting market, so when Huawei is attacking the digital energy field, other companies have also smelled the signal of industry changes.
For example, in 2022, ZTE set up a digital energy business department to integrate existing products such as power supply, energy storage, IDC (data center) and energy management to fully penetrate the energy industry; in the same year, Industrial Fulian also established a new digital energy related department; the State Grid, China Southern Power Grid, Sinopec, National Energy Group, China Energy Construction, State Power Investment and other energy central enterprises have also set up special digital companies.
In the face of the accelerated expansion of the industry, Huawei Digital Energy believes that its unique value is the digital technology and power electronics technology accumulated by more than 30 years of long-term research and development investment.
For future development, they also deliberately emphasized "openness", which is also one of the most frequently mentioned words in Huawei's financial report meetings in the past three years.
What is an open ecosystem strategy? That is, hardware openness, software openness, and multi-level cooperation with the industry. Specifically, hardware openness is to adhere to the Inside strategy, the core hardware products/modules can be provided to partners in a variety of ways such as ODM, secondary development/integration; software openness is to create an open energy management cloud.
Huawei Guo Ping looked forward in the 2021 annual report that facing the future, Huawei will move forward in the direction of digitalization, intelligence, and low carbon, continue to increase investment, rely on the three elements of talent, scientific research and innovation spirit, and strive to achieve the reconstruction of the technical base.
Everything has just begun, whether digital energy can become a new weapon for Huawei to break through, the answer still needs to wait. (This article was first published on Titanium Media App, author/Han Jingxian, editor/Zhang Min)