Integrated Smart Energy Project with EDF (China)

Meishan Integrated District Energy Distribution Project

The Meishan Project is in the Meishan New Economic Development Zone, an economic zone situated next to central urban area of Meishan City, Sichuan province, the PRC, with a planned development area of 50.5 square kilometres. The Meishan New Economic Development Zone will be a hub for manufacturers of drugs, supplements, medical equipment, and other medical related supplies. The year-round constant demand of steam necessary to produce drugs makes the Meishan New Economic Development Zone an ideal platform for integrated district energy distribution. The Meishan Project is planned to be developed in two or three phases.

Haitang Bay Integrated Energy Systems Project

Latest Update

CF Energy owned joint venture company with the EDF Group, EDF Changfeng (Sanya) Energy Co Ltd., the Haitang Bay Integrated Smart Energy project company (“EDF Changfeng”), has achieved a new milestone of procuring its first client, the Sanya Haitang Bay Edition Hotel (the “Edition Hotel”) following the signing of a centralized cooling service contract (the “Contract”) with the Edition Hotel. The Contract outlines the supply of cooling by EDF Changfeng to the Edition Hotel for a term of one year subject to renewal, at a fixed cooling capacity of 4,109 kWr per year. The contract further stipulates that the commencement date for supplying cooling will be subject to construction progress of the first energy station.

Project Introduction

Sanya is China’s only tropical seaside resort city. Its excellent environment and beautiful natural scenery makes up the core of Sanya’s development. For many years, the municipal government of Sanya have remained keen on environmental protection and sustainable development. In 2015, Sanya became the only pilot city to adopt the “Dual Remediation” (Ecological Remediation and City Remediation) and “Dual City” (The Sponge City construction and Underground Pipe Gallery construction) project. Furthermore, the municipal government of Sanya determined a “Six-in-One” urban planning mandate to achieve: low-carbon economy, low-carbon transportation, low-carbon construction, low-carbon living, low-carbon environment, low-carbon society in order to develop Sanya into the lowest carbon emission city. This goal has been listed in the top 10 development projects of the government work report in 2017.

EDF (China) Holding Ltd., a subsidiary of électricité de France (the “EDF group”). EDF is the world's biggest electricity generation company and for almost 30 years, the EDF group has been actively developing business in China. The business scope includes power generation and distribution, smart power grids, solar energy, heating, public lighting, and electric vehicle charging infrastructure etc.

CF Energy Inc. has been operating in the natural gas business in Sanya for 21 years and has established good business relations with the municipal government of Sanya. Since 2013, CF Energy Inc. has now repositioned with a strategic adjustment, looking for new opportunities for the company.

EDF (China) Holding Ltd., a subsidiary of électricité de France (the “EDF group”) and Sanya Changfeng New Energy Investment Co., Ltd., a wholly owned subsidiary of CF Energy, will cooperatively develop the Integrated Energy System project in order to promote a low-carbon and energy-efficient urban city. The Sanya Municipal Government also supports this integrated energy project in Haitang Bay Area of Sanya City as proposed by EDF Group and CF Energy. The Sanya Municipal government, EDF group, and CF Energy confirmed the intention to collaborate in transforming Sanya into a low-carbon smart city with Haitang Bay as a pilot project. If the Haitang Bay pilot project is successfully executed, CF Energy will extend this operating model to cities across China.

At the moment, EDF (China) Holding Ltd., and Sanya Changfeng New Energy Investment Co., Ltd., have signed a “Cooperation Statement”. Based on the Statement, the Sanya Municipal Government, CF Energy, and EDF Group will further discuss the feasibility to establish a Joint Venture Company (the “Joint Venture”) and jointly invest and operate in energy utilization project in Sanya City. The project investment is expected to exceed 1 billion RMB.

Market Potential

Haitang Bay is located on the southern tip of Hainan Island, northeast of Sanya City, with a planned development area of 98.17 square kilometers, 28 kilometers from the downtown area. Haitang Bay’s major industries include: coastal resort hospitality, yacht club, new technology (IT), medical centers, and other modern service industry. It is planned to develope this area into a new township with more than twenty (20) five-star hotels. Haitang Bay began its planning and construction in 2008, recently, the project has begun to take shape with twelve newly built luxury hotel in the area (such as the Intercontinental Hotel and Sheraton hotel etc). Furthermore, there is also the People’s Liberation Army General Hospital and a duty-free shopping mall. The is also a number of proposed luxury hotels under construction, such as the Atlantis Hotel, the Four Seasons and the Mandarin Oriental Hotel etc.

The project’s target customers are hotels, shopping malls, schools, hospitals and convention centers with central air conditioning and hot water. The Integrated Energy System project conforms to the government’s state policies on carbon reduction. Energy efficiency use will be the only direction of energy saving and emission reduction in the future. China is the second largest energy consumer in the world’s, and EDF China Holding Ltd holding the one of the highest technology, therefore, low-carbon energy has a vast space for growth in China.